Развитие навыков в малых и средних фирмах ОЭСР 2013

OECD Skills Studies
Skills Development
and Training in SMEs
Local Economic and Employment Development (LEED)
Skills Development
and Training in SMEs
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Please cite this publication as:
OECD (2013), Skills Development and Training in SMEs, Local Economic and Employment Development
(LEED), OECD Publishing.
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PREFACE
Preface
T
he main assets for any firm, especially small and medium sized enterprises (SMEs) are their
human capital. This is even more important in the knowledge-based economy, where intangible
factors and services are of growing importance. The rapid obsolescence of knowledge is a key feature
of the knowledge economy.
However, we also know that for a small business it is very difficult to engage staff in education
and training in order to update and upgrade their skills within the continuous or life-long learning
approach. Even in the 21st century there is still a huge difference between large firms and small
firms when we talk about workforce development. Small businesses cannot do it alone – they need
to engage in partnership with local providers of training and local authorities. It is from within the
local labour market’s neighbouring areas that the supply and demand of labour should be matched
with the skills and training required, but in many countries all too often the provision of training for
small businesses is overly centralised and supply driven.
The findings of this report show that skill upgrading mechanisms for SMEs should rather be
decentralised and demand-driven. This implies a major structural reform in the way in which the
interaction between local authorities of Vocational Education and Training (VET) and the enterprises
are structured. We also have to consider that regional universities have a role to play in this context,
because the third mission of universities, after teaching and research, consists of supporting the local
economies of the area in which they are located. In particular, this involves supporting SMEs in their
innovation processes – another way of informal skills upgrading. In the relationship between
industry and university, most of the interaction occurs with large firms. It is high time for universities
to engage also with SMEs.
The results presented in this report show the emerging direction that skills development
and training needs to take in order to stay relevant to SMEs. The report presents novel data from
1 081 SMEs on the training activities of microfirms, a group of firms that all too often cannot be
captured adequately via statistical collections. Finally, the report calls for action by policy makers
and training providers. The work the OECD Centre for Entrepreneurship, SMEs and Local
Development, and the Local Economic and Employment Programme (LEED) have carried out through
this study puts its finger on one of the critical factors that needs to be addressed if we want our
countries to stay competitive and tap into new sources of growth and job creation.
Sergio Arzeni
Director
OECD Centre for Entrepreneurship, SMEs and Local Development
SKILLS DEVELOPMENT AND TRAINING IN SMES © OECD 2013
3
ACKNOWLEDGEMENTS
Acknowledgements
D
r Cristina Martinez-Fernandez directed the Leveraging Training and Skills Development in
SMEs “TSME” project in collaboration with experts from six countries: Professor Ans De Vos
from Vlerick Leuven Gent Management School, Flanders, Belgium; Prof Paul Belanger and
Ms Sylvie Ann Hart from Université du Québec à Montréal, Canada; Prof Paul Dalziel from
Lincoln University, New Zealand; Mr Michal Kubisz from Poland; Ms Sirin Elci from
Technopolis Group, Turkey; Prof Anne Green and Dr Laura Martinez-Solano from Warwick
University, the United Kingdom. Dr Martinez-Fernandez has prepared this synthesis report
with research assistance and cross-country analysis by Dr Samantha Sharpe of the
University of Technology Sydney and Dr Tamara Weyman.
Dr Sylvain Giguère, Head of the LEED Division and Mr Sergio Arzeni, Director of the
Centre for Entrepreneurship, SMEs and Local Development, provided valuable comments
and suggestions for the direction of the project, the analysis and the policy conclusions.
The country Delegates to the OECD LEED Committee and the other government officials in
the participant countries provided valuable insights for this project, particularly those
participating in the analysis: Mr Robert Strauss of the European Commission Directorate
General Employment, Social Affairs and Inclusion; Ms Ann Van den Cruyce of the Ministry
of Labour and Social Economy in Flanders; Mr Paul Barker of the Ministry of Labour, New
Zealand; Mr Pawel Chorazy, Ministry of Regional Development, Poland; Mr Murat Demirez
of KOSGEB (Small and Medium Enterprises Organisation, Republic of Turkey), Turkey;
Professor Mike Campbell, Dr Lesley Giles, Ms Katerina Rudiger and Ms Abigail Gibson of the
United Kingdom’s Commission for Employment and Skills; and Mr John Atherton and
François Lamontagne of Human Resources and Skills Development Canada.
Damian Garnys provided support with preparing the survey platform and the
management of the electronic surveys. Helen Easton, Malika Taberkane, Thomas
McGarvey, Emma Mooney, Elisa Campestrin, Francois Iglesias provided secretarial
assistance for the project. Ms Melissa Telford undertook editing and formatting of the
report. Ms Malgorzata Jableka and Mr Przemysław Herman of the Poland Ministry for
Regional Development, Ms Tabea Kolbel of the OECD Business and Industry Advisory
Council (BIAC), and Mr Roland Schneider of the OECD Trade Union Advisory Committee
(TUAC) have provided valuable inputs and suggestions for this report.
As with all forms of empirical research, the research team is grateful for the time and
thoughts of over 1 000 small and medium sized businesses that participated in the survey,
the firms and organisations that participated in the skill ecosystem workshops, and the
managers of enterprises who made themselves available to be interviewed.
4
SKILLS DEVELOPMENT AND TRAINING IN SMES © OECD 2013
TABLE OF CONTENTS
Table of contents
Acronyms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
Executive summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11
Overview of training and skills development in SMEs. . . . . . . . . . . . . . . . . . . . . . . . . . .
15
Part I
Cross-country analysis of skills development approaches in SMEs
Chapter 1. Formal training and skills development: The state of play . . . . . . . . . . . . . .
Company size and training activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SME participation in vocational training. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Types of vocational training provided . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Participation in initial VET. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reasons firms may not provide training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Processes of training provision in firms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Assessing skills requirements and undertaking training planning . . . . . . . . . . . . .
Effect of public policy measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Conclusions and policy implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27
28
29
31
32
33
34
35
37
39
Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
39
40
Chapter 2. Skills development on the ground: Formal
and alternative approaches by firms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
In-depth analysis of access to formal and alternative training activities . . . . . . . .
Characteristics of training and skills development in SMEs . . . . . . . . . . . . . . . . . . .
Effects of the financial crisis on firms’ recruitment and training activities . . . . . .
Skills identification in firms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Motivation and collaboration for training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Conclusions and policy implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
41
42
43
50
51
52
53
Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
54
55
Chapter 3. Innovators, exporters and new skills development . . . . . . . . . . . . . . . . . . . .
Skills development in innovative firms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Skills development and the market orientation of firms . . . . . . . . . . . . . . . . . . . . . .
Skills, sectors and clusters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Development of new skills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Conclusions and policy implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
57
58
60
62
64
68
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
69
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TABLE OF CONTENTS
Chapter 4. Learning by doing – best practices in training and skills development . . .
Case study interviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The impacts of the financial crisis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Training and skills development plans/structures of firms . . . . . . . . . . . . . . . . . . . .
Formal industry training/vocational education and training activities in firms . . .
Informal (KISA) skilled development activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Motivation and collaboration with other institutions . . . . . . . . . . . . . . . . . . . . . . . . .
SMEs’ responses to climate change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Conclusion and policy implications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
71
72
73
74
77
80
82
88
92
Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
95
Chapter 5. Skills and training ecosystems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The skill ecosystem concept . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
West Midlands skill ecosystem (United Kingdom). . . . . . . . . . . . . . . . . . . . . . . . . . . .
East Flanders skill ecosystem (Belgium) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Canterbury skill ecosystem (New Zealand). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Zaglebie skill ecosystem (Poland) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The industrial zone of OSTIM, Ankara skill ecosystem (Turkey) . . . . . . . . . . . . . . . .
Manitoba and Quebec (Canada) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Synthesis analysis – trends and conclusions across all the case studies. . . . . . . . .
Conclusions and policy implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
97
98
100
102
103
105
106
108
110
113
Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
Part II
Key highlights from case studies
Chapter 6. Training in SMEs in the Canterbury region, New Zealand. . . . . . . . . . . . . . .
Background to the New Zealand case study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Specific issues for Canterbury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Implications for policy development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
117
118
120
121
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
Chapter 7. Training in SMEs in the West Midlands region, the United Kingdom . . . . . 125
Background to the United Kingdom case study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
Implications for policy development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
Chapter 8. Training in SMEs in the East Flanders region, Belgium . . . . . . . . . . . . . . . . .
Background to the Belgian case study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Specific issues for East Flanders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Implications for policy development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
131
132
134
134
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
Chapter 9. Training in SMEs in the Zaglebie sub-region, Poland . . . . . . . . . . . . . . . . . . . 137
Background to the Polish case study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138
Implications for policy development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
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SKILLS DEVELOPMENT AND TRAINING IN SMES © OECD 2013
TABLE OF CONTENTS
Chapter 10. Training in SMEs in the industrial zone of OSTIM, Ankara, Turkey . . . . . . 141
Background to the Turkish case study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
Implications for policy development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
Chapter 11. Training in SMEs in the Montréal and Winnipeg urban regions, Canada . . 147
Background to the Canadian case study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148
Implications for policy development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
Annex A. Contributors’ biographies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
Annex B. Survey participant characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159
Tables
2.1.
2.2.
2.3.
3.1.
3.2.
Outcomes of formal training in skills areas by country . . . . . . . . . . . . . . . . . . . . 46
KISA outcomes by type and skill level of employees . . . . . . . . . . . . . . . . . . . . . . 48
In-house motivations for skills development activities . . . . . . . . . . . . . . . . . . . . 53
Areas of skills development, by development method in innovative firms . . . 60
Outcomes for entrepreneurship and green skills
by employee skills level and country . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
4.1. Number of case studies per participating country . . . . . . . . . . . . . . . . . . . . . . . . 72
5.1. Regional SMEs’ levels of interaction with training organisations. . . . . . . . . . . . 112
B.1. Survey populations and sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159
Figures
1.1.
1.2.
1.3.
1.4.
1.5.
1.6.
1.7.
1.8.
1.9.
1.10.
2.1.
2.2.
2.3.
2.4.
2.5.
2.6.
2.7.
3.1.
3.2.
3.3.
3.4.
3.5.
3.6.
3.7.
Participation rates of enterprises by size in Europe (1999 and 2005) . . . . . . . . .
Participation in vocational training by size of firm in Europe (2005) . . . . . . . . .
Types of vocational training by size of firm in Europe (2005). . . . . . . . . . . . . . . .
Apprentices as a percentage of the labour force . . . . . . . . . . . . . . . . . . . . . . . . . .
Reasons for not providing training (Europe, 2005) . . . . . . . . . . . . . . . . . . . . . . . .
European training enterprises using external advisory services (2005). . . . . . .
Percentage of European enterprises assessing staff training needs (2005) . . . .
Percentage of European enterprises assessing future skills needs (2005) . . . . .
Public measures’ impacts on training for European enterprises (2005) . . . . . . .
EU27 enterprises providing focused training for specific employees (2005) . . .
Formal training participation by various employee groups. . . . . . . . . . . . . . . . .
Use of accredited trainers and formal qualifications by country . . . . . . . . . . . .
Informal/alternative training participation by employee group . . . . . . . . . . . . .
Main sources of KISA by country and skill level of employees . . . . . . . . . . . . . .
KISA compared to VET for skill development by knowledge area . . . . . . . . . . .
Impact of GFC on training activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Incentives for skill development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Innovative activities in TSME survey firms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Participation in skills development activities within innovative firms . . . . . . .
Export orientations of surveyed firms by country. . . . . . . . . . . . . . . . . . . . . . . . .
Market orientations of firms by level of innovative activity . . . . . . . . . . . . . . . .
Industrial compositions of firms by country . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Skills outcomes by skills areas in manufacturing firms (VET versus KISA) . . .
Skills outcomes by skills areas in service firms (VET and KISA) . . . . . . . . . . . . .
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30
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47
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TABLE OF CONTENTS
3.8.
3.9.
4.1.
4.2.
4.3.
4.4.
4.5.
4.6.
4.7.
4.8.
5.1.
5.2.
5.3.
5.4.
5.5.
5.6.
5.7.
5.8.
5.9.
5.10.
8
Entrepreneurial and green skills needs by country. . . . . . . . . . . . . . . . . . . . . . . .
Firms with better outcomes from KISA in green and entrepreneurial skills . .
Skills required by firms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Training and skills development plans/structures/approaches . . . . . . . . . . . . .
SMEs’ training and skills development plans/structures . . . . . . . . . . . . . . . . . . .
SMEs’ formal training and skills development model . . . . . . . . . . . . . . . . . . . . .
Informal (KISA) training and skills development model . . . . . . . . . . . . . . . . . . .
Other interactions with stakeholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Motivation and collaboration – SME model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Climate change – company modifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Skill ecosystem dynamics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
West Midland’s skill ecosystem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
East Flanders skill ecosystem. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Canterbury’s skill ecosystem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Zaglebie’s skill ecosystem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
OSTIM skill ecosystem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Quebec’s skill ecosystem. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Manitoba’s skill ecosystem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SMEs’ overall levels of interaction with training organisations . . . . . . . . . . . . .
Regional SMEs’ levels of interaction with training organisations. . . . . . . . . . . .
64
67
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ACRONYMS
Acronyms
CEDEFOP
CME
CO2
CPIT
CTE
CVET
CVTS
ESF
ESITO
EU
GBM
GDP
GFC
HR
HRD
HRDC
ISO
IT
ITO
KISA
LEED
LSC
ME
METU
NESS
NGO
NZD
OECD
OHS
OIZ
OSTIM
PIAAC
R&D
RDA
RSP
SE
SFA
SMEs
European Centre for the Development of Vocational Training
Canadian Manufacturers and Exporters Association
Carbon dioxide
Christchurch Polytechnic Institute of Technology
Career and technical education
Continuing Vocational Education and Training
Continuing Vocational Training Survey
European Structural Fund
Electricity Supply Industry Training Organisation
European Union
Group-based mechanism
Gross domestic product
Global financial crisis
Human resources
Human resources development
Human Resources and Social Development Canada
International Organization for Standardization
Information technology
Industry training organisations
Knowledge intensive service activities
Local Economic and Employment Programme
Learning and Skills Council
Medium-sized enterprises
Middle East Technical University
National Employer Skills Survey for England
Non-government organisation
New Zealand dollars
Organisation for Economic Co-operation and Development
Occupational health and safety
Organised industrial zone
Middle East Industry and Trade Centre
Programme for the International Assessment of Adult Competencies
Research and development
Regional development agency
Regional Skills Partnership
Small-sized enterprises
Skills funding agency
Small and medium sized enterprises
SKILLS DEVELOPMENT AND TRAINING IN SMES © OECD 2013
9
ACRONYMS
TSME
VET
WEM
YPLA
10
Leveraging Training and Skills Development in SMEs Project
Vocational Education and Training
Workplace Education Manitoba
Young People’s Learning Agency
SKILLS DEVELOPMENT AND TRAINING IN SMES © OECD 2013
Skills Development and Training in SMEs
© OECD 2013
Executive summary
T
he Leveraging Training and Skills Development in SMEs (TSME) project examines access to
training by SMEs across seven regions in six OECD countries and the policy issues related
to low access rates of SMEs to training and skills development. A further related issue is
how to recognise the increasing importance of informal training and/or alternative skills
development methods, such as knowledge intensive service activities (KISA). The project
used surveys and case studies to look at how both formal and alternative ways of training
and skills development interact. It identifies impacts at three levels: for the firm and
employees; for the industry; and for the local area in which the firm is located. The project
contributed to the “OECD Skills Strategy”.
The seven regions participating in the project are: East Flanders (Belgium); the Middle
East Industry and Trade Centre (OSTIM) industrial zone in Ankara (Turkey); Canterbury
(New Zealand); the Zaglebie sub-region (Poland); the West Midlands region (United
Kingdom); and Quebec and Manitoba in Canada.
A number of different factors drive training activities for SMEs: for firms it is the
market, the need to remain competitive in what is offered to customers; for employees it is
acquiring skills that can lead to better jobs and remuneration; for communities, the driver
is to create dynamic industrial and labour markets that survive economic downturns and
provide a variety of employment opportunities and increased local development.
Summary of results
Findings from the TSME project highlighted seven important characteristics of training
and skills development activities in firms across the regions and countries involved in the
study. These characteristics refer to common training implementation variables among
SMEs and areas of significant variation in SME training patterns. They show that market
forces dominate current and future take-up of opportunities for skills development.
1. SMEs use both formal and informal training
Survey and case study analysis indicates that firms and employees use both formal
training and informal knowledge intensive service activities (KISA) as ways of learning in
order to acquire the knowledge and skills they need, particularly for their innovation and
entrepreneurial processes.
2. Better outcomes reported from informal training
Firms report better skills development outcomes from informal training and skills
development activities (particularly through participation in knowledge intensive service
11
EXECUTIVE SUMMARY
activities) than from formal vocational training. This is particularly the case for highly
skilled employees, and highlights a critical area of divergence between high- and lowskilled employees. It is possible that there would be similar positive outcomes for lowskilled employees if they participated more in KISA and other informal skills development
within the workplace.
3. Significant variations exist across regions and employee skill levels
Survey results showed varying training and skills development activities across
regions and countries, and between high- and low-skilled employees across countries.
High- and low-skilled employees, overall, have equal access to training and skills
development, but there are significant differences related to participation in alternative
training and the type of training undertaken in both employee groups.
4. Training for highly skilled employees focused
on productivity-enhancing skills
The main skills development areas for low-skilled employees are generic, routine,
occupational health and safety, and information technology (IT) skills, whereas for highly
skilled employees, the focus is on productivity and competence-building skills areas
(e.g. technical and management skills, entrepreneurship), and, to the extent that they are
undertaken at all, green skills. This applies to both manufacturing and service firms. Skill
level also differentiates the knowledge-sourcing environment of employees, with highskilled workers appearing to have more complex knowledge-sourcing environments than
low-skilled employees.
5. “Growth potential” SMEs focused on productivity enhancing skills
via informal training
Highly innovative and exporting firms were used as proxies for “growth potential”
firms. In these firms, although the overall rate of participation in training activities was not
vastly different to the survey population as a whole, the skill areas targeted were markedly
different. For “growth potential” firms, the concentration was on the productivity
competence-building skills sets of business planning, management and also on technical
skills. When comparing the results of “growth potential” firms against the survey
population as a whole, rates of participation in informal training were twice as high as
those of the rest of the firms.
6. Market forces are the primary motivation for SME training activity
Market forces are the main drivers for skills development in firms, particularly
informal skills development. They result from in-house demands arising from product
development or production needs, or as the result of financial adjustments (e.g. pressure to
do more with similar resources), or participation in external private sector activities with
clients and suppliers. Regulations and policies and other public incentives supporting
training participation and business development are not seen as the dominant drivers for
the majority of firms. Regulation and public policies are still important supports for
training activities, but for most firms, the motivation for training activities initially stems
from their need to respond to market forces.
12
SKILLS DEVELOPMENT AND TRAINING IN SMES © OECD 2013
EXECUTIVE SUMMARY
7. “Growth potential” SMEs are most likely to take up opportunities
in the green economy
Analysis shows that highly innovative firms are more likely to participate in
innovative activity for the “green” economy, and also have a stronger focus on
entrepreneurial skills.
Policy implications
Acknowledge that skills development is a resource intensive activity
for SMEs
This study shows that most firms find it difficult to assess their skills needs. This is
further compounded by decisions about training variables: formal versus informal;
whether or not the training leads to a qualification; if it is for highly skilled or lower skilled
employees, or both. SMEs have a finite amount of resources they can dedicate to these
activities, so policy interventions need to focus on areas that offer SMEs a way to
systematise their training practices. Also, recognising that skills development is a resource
intensive activity, attention must be paid to demonstrating the benefits for firms of
participating in training activities – in other words, the returns on their training and skills
development investments must be sufficient to offset the costs. Public investments in
training activities are also finite and should focus on areas where the return on public
investment is highest.
Recognise and encourage skills development via informal/alternative training
The central policy implication emerging from the TSME study is that there needs to be
recognition of skills developed informally, such as qualifications, in much the same way as
there is for formal skills development. This does not mean a shift away from formal training
for employees – there are instances where formal training is appropriate, for example,
apprenticeships. About 80% of the current workforce will still be in the labour market in ten
years’ time; they thus represent a central source of skills. Informal skills development
represents a flexible and adaptive route for skills development within this population.
Recognition of informal training through qualifications also offers a pathway for skills
development as part of an employee’s life-long learning activities. The results of the
present study clearly show that firms use informal skill development more than formal
skill development and that they are obtaining better outcomes from informal activities
than from formal activities. In order to increase both the stock and quality of skills for
SMEs, the qualifications system needs to find a way to recognise and encourage informal
skills development.
Allow market forces to inform policy action
The survey results showed that both in-house and external market forces were the
main drivers for firms’ training activities within their supply-chain or industry, rather than
public sector skill development programmes. However, of itself this does not negate the
need for government intervention in the provision of training support. There are many
reasons in the areas of both market failure, and public good, where the market provides,
and will continue to provide, suboptimal training and skills development, particularly for
marginalised groups or individuals.
SKILLS DEVELOPMENT AND TRAINING IN SMES © OECD 2013
13
EXECUTIVE SUMMARY
However, where a public policy intervention has an objective of requiring an action
from SMEs, it is important to understand why and when firms are likely to act. Policy
interventions need to be directed towards the points at which SMEs are making decisions
about skills development and training activities within their firms. These will be different
to the decision points at which employees seek skills development. Where possible, public
sector activity aimed at increasing SME’s participation in skills development activities
should target areas where the market fails SMEs (e.g. a lack of information and incentives
for training providers to offer customised training for SMEs), rather than public good
objectives (e.g. training of employees in SMEs).
Allow for local responses, but demand a uniform focus
on productivity skills
The characteristics of skill development vary across local areas and regions, and are
strongly influenced by industrial concentrations and existing skill levels. The regional
workshops, combined with the survey analysis, revealed the importance of the local
context when it comes to collaboration between skills development activities in firms and
training organisations.
However, there are some fundamental skills related to productivity, entrepreneurship,
and, increasingly, green skills, which should become foundation skills sets for all firms.
Local customisation should be encouraged to meet specific local needs, but not at the
expense of these foundation and highly transferable skills.
Establish a community of practice
The need for regional/local customisation should be supported by a common platform
of knowledge regarding how SMEs use training to develop skills within their workforces
and what works, what does not work, and what are best practice activities across different
regions or communities.
14
SKILLS DEVELOPMENT AND TRAINING IN SMES © OECD 2013
Skills Development and Training in SMEs
© OECD 2013
Overview of training and skills
development in SMEs
by
Cristina Martinez-Fernandez and Samantha Sharpe
This report presents the findings from the Leveraging Training and Skills
Development in SMEs Project (TSME). The report is the result of a three-year
research programme and includes analysis of empirical evidence collected from
official statistical sources, surveys and interviews with various businesses, case
studies, and workshops.1
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OVERVIEW OF TRAINING AND SKILLS DEVELOPMENT IN SMES
Why study skills development in SMEs?
Small and medium sized enterprises (SMEs) are gaining visibility as both important
players in the dynamics of international economies and as significant drivers of innovation
and employment generation. Enhancing the environment within which SMEs interact with the
economy is also improving, through a focus on human capital policies (skills and training)
aimed at stimulating continuous innovation within SMEs as a means of driving growth.
However, while there is evidence that skills and training policies have positive effects on
large firms, their impact on SMEs is limited, as is their effectiveness for, and indeed ability to
reach, the lower skilled workers. Policies and programmes targeted at SMEs have been in
existence for decades, but the gap between large and small firms still exists. Solutions to this
situation will require both in-depth understanding of the contexts and issues related to
training within SMEs, as well as innovation in the responses to these contexts and issues.
A further issue of interest arising from this research is understanding how skills
development contributes to the fundamental competitiveness of businesses, regions and
countries and how, recognising that skills development activities have a cost to businesses,
employees and regions assess the returns they receive for their efforts in skills development.
The size of the firm appears to be an important determinant in the development of the
workforce, specifically in terms of labour force participation in upgrading their skills. Data
across OECD countries show that SMEs participate in 50% fewer training activities than
large firms. There is also a systematic access gap: younger, better-educated workers in
high-skilled occupations (such as managers, professionals and technicians) have greater
access to training opportunities than the other workers.
The benefits of training and workforce development to both firms and employees are
well established. However, despite these benefits, OECD research since 2003 has
consistently demonstrated that small and medium enterprises are less likely to participate
in training programmes than are employees in large enterprises. For less educated and
older workers there is even less take-up of skills development.
Policy analysis confirms that formal training policies and measures targeting workers
do not reach SMEs very well. Other policies targeting skills development via more informal
competence building measures also seem unable to reach SME workers with low levels of
skills and education.
Some evidence has shown that informal mechanisms are able to offer employers the
flexible training delivery that suits the operation of SMEs, but are limited in scope for
employees as informal training usually carries no formal recognition or qualifications. The
policy challenge is to match the flexible and “needs-based” delivery mechanism of
informal training that employers require, with a system of skills recognition that enables
employees to receive qualifications for their knowledge.
Skills provide workers with one of their main sources of competitiveness and potential
for improvement of living standards. In our knowledge-based integrated economies, the
16
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OVERVIEW OF TRAINING AND SKILLS DEVELOPMENT IN SMES
quality of the labour force plays a powerful role in determining where capital goes and the
strength of endogenous development activities. Accordingly, the OECD devotes significant
efforts to understanding how best to stimulate skills development and vocational training,
which has resulted in the recently launched “OECD Skills Strategy”.
The drivers of training and skills development activities in SMEs are multi-faceted. For
firms, the drivers of training are market-based; designed to increase the competitiveness
of their firm. For employees, OECD studies since 1999 have shown that participation in
continuous education and training has a positive impact on workers’ performance.
According to these studies, training raises a worker’s probability of being employed and
improves re-employment chances when a worker has been laid off. There is also evidence
that more skilled employees achieve higher wages and faster wage growth than equivalent
employees with less training participation.
For local actors, including policymakers acting at the regional level, what drives
support for training activities in SMEs is a combination of both company and employee
motivators. Competitive firms and highly skilled, well-paid employees add to regional
dynamism. This dynamism can protect regions from the worst impacts of economic
downturns, and provide stimulus to a wide range of unrelated industries and employment,
such as service industries.
Wage growth and wage-enhancement seem to be constant, regardless of educational
attainment and type of training. OECD studies from 1999 have revealed that these
incentives are also strong enough to protect workers from possible wage losses arising
from job change. Enhancing the environment in which SMEs are embedded and within
which they interact is also improving, through the policy focus on human capital policies
(skills and training) aimed at stimulating continuous innovation in SMEs (Lal and
Dunnewijk, 2008).
The knowledge gap in SME’s skills development
Although there is recognition that low levels of training participation by staff within
SMEs impact the employees’ productivity and labour-force mobility, as well as the
company’s productivity and adaptability to what is an increasingly knowledge intensive
business environment, questions about the dynamics of these impacts remain. These
questions include:
●
What is the impact of skills development on knowledge intensive or productivity
enhancing activities in SMEs? What is the impact of these activities on employability of
the labour force, particularly the lower qualified?
●
How can SMEs increase the participation of low-skilled and low-qualified employees,
particularly informal skills development such as KISA (knowledge intensive service
activities)? What incentives and mechanisms can be provided to employers to increase
this participation?
●
How can the skills developed through informal activities be recognised with formal
qualifications?
●
How can the different networking elements across the supply chain of SMEs and local
innovation systems contribute to a greater participation of the labour force in training
and skills development activities? What examples of best practices are available in OECD
countries? What are the lessons both for productivity enhancement and workforce
development?
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OVERVIEW OF TRAINING AND SKILLS DEVELOPMENT IN SMES
Approach and methodology
The TSME project approached SME skills development from two perspectives: the
company level and the local/network level. At the company level, the project examined
how informal activities influence labour force development and skills upgrading of
different groups of employees (knowledge and so-called routine workers). At the local/
network level the study analysed the different elements influencing local training and
skills upgrading and the level of training by SMEs in the area.
The project included case studies in six countries: Belgium, Canada, New Zealand,
Poland, Turkey and the United Kingdom. SMEs were selected from various low-medium
technology industry sectors such as forestry, manufacturing, tourism, insurance, and from
various high technology sectors.
There were three sources of empirical data collection within each of the country case
studies: an electronic survey of the firm; a skill ecosystem workshop; and case studies of the
selected firm. The in-country data collection was complemented by various cross-country
analyses, including a background official statistical report, which compared available
statistical evidence on SME training and skills development activities across OECD member
countries; a preliminary cross-country survey report, which compared preliminary survey
results between the case study countries; and this final integration report, which presents
analysis and conclusions from across all of the TSME study activities and draws policy
conclusions for SME skills and training development in OECD member countries.
Conclusions and policy implications
Findings from the TSME project have highlighted four important characteristics of
informal training and skills development activities in firms across the regions and
countries involved in the study:
●
Firms are using both formal and informal training for skills development.
●
Some firms get better results from alternative rather than formal training.
●
There are areas of significant variation across countries, skills areas, and training types.
●
Market forces drive training activities.
Firms use both formal training and KISA for skills development
Survey and case study analysis indicates that firms and employees use both formal
vocational training and alternative, knowledge intensive service activities (KISA) ways of
learning to acquire the knowledge and skills they need, and specifically the skills needed
for their innovation and entrepreneurial processes.
Formal training programmes within firms, such as learning circles, and job rotation,
exchanges or secondments have limited participation by SMEs (probably due to their lack
of critical mass), which suggests that these firms could benefit from a network approach to
this type of learning, such as that more commonly utilised by large firms. For example,
several SMEs could join together to organise learning circles or exchanges of personnel
within an industry cluster or value-chain.
Recruitment is the main form of bringing in new, and updating old, skills in the firm. This
is a major barrier to company innovation and competitiveness if the sector in which the firm
operates evolves rapidly and needs to adjust its knowledge base. A recent report, by the
European Centre for the Development of Vocational Training (Cedefop, 2010), noted that
employment growth over the next 10-15 years will be predominantly in knowledge and skills
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OVERVIEW OF TRAINING AND SKILLS DEVELOPMENT IN SMES
intensive occupations, and that the labour market for these employees will be strong. SMEs
will be less able in the future to recruit new employees to fulfil their skills needs, and therefore
plans for improving the skills of their workforce need to be part of SMEs’ business operations.
SMEs in most countries do not use external training centres for their workforce
development, but some notable examples in countries such as Denmark and Italy indicate
that the culture and tradition of training to a large extent influences organisational
strategies for participation in training.
The use of external training advisory services presents a similar pattern for SMEs as
for large enterprises, which indicate that policy instruments facilitating the use of external
providers for training and skills development are well in line with SMEs’ use of these
instruments, and could be further developed and promoted as a strategic approach to
workforce development in SMEs.
Some firms obtain better results from KISA
A significant proportion of firms report better skills development outcomes from
informal training and skills development activities (particularly through participation in
knowledge intensive service activities) than via formal vocational training. This is
particularly the case for highly skilled employees, and highlights another area of
divergence between high- and low-skilled employees. It is possible that similar positive
outcomes would result for low-skilled employees if they participated more in KISA and
other informal skills development activities in the workplace.
Areas of significant variation in SMEs’ training patterns
Variations across regions and employee skill levels
Survey results show differing training and skills development activities across regions and
countries, and between high- and low-skilled employees across countries. Analysis of survey
results show that overall access to training and skills development is relatively equal between
high- and low-skilled employees, but there are significant differences in participation rates for
alternative training and the type of training undertaken by both employee groups.
Skill development for highly skilled employees focused on productivity enhancing skills
The main skill development areas for low-skilled employees are: generic; routine;
occupational health and safety; and IT skills; whereas for highly skilled employees they are
focused on productivity and competency building skills areas such as: technical;
management; entrepreneurship; and, to the extent that they are undertaken, green skills.
This holds true across both manufacturing and service firms. Skill level also characterises
the knowledge-sourcing environment of employees, with higher skilled workers appearing
to have more complex knowledge-sourcing environments than lower skilled employees.
“Growth potential” SMEs focused on productivity enhancing skills via informal training
Highly innovative and exporting firms were used as proxies for high growth potential
firms in this research. Whilst realising that the dimensions of productivity in SMEs was not
an overarching objective of this research, as with all applied business research, concerns
for productivity and how it can be enhanced need to be top of mind.
In “growth potential” firms, the overall rate of participation in training, both formal
and informal, was not vastly different to the whole survey population – however, the skill
SKILLS DEVELOPMENT AND TRAINING IN SMES © OECD 2013
19
OVERVIEW OF TRAINING AND SKILLS DEVELOPMENT IN SMES
areas in which these activities were focused was markedly different. For knowledge
intensive firms, training activities were concentrated in the productivity competency
building skills sets of business planning, management and technical skills. When
comparing the results of knowledge intensive firms against the survey population, rates of
participation in informal training were twice as high in the knowledge intensive firms.
This research shows that innovative and exporting firms are accessing more skills
development in productivity enhancing areas such as business planning and management
skills. The data show an association between these types of activities and the exporting
and innovation also being carried out within these firms. Market forces dominate current
and future take-up of skills opportunities.
Market forces are the primary motivation for SME training activity
The main drivers for skill development in firms, particularly informal skills
development, are market forces. These result from in-house demand due to new product
development, production needs, as the result of financial adjustments (pressure to do
more with similar resources), or from participation in external private sector activities with
clients and suppliers. Regulations and policies and other public incentives supporting
training participation and business development are not seen as being the dominant
drivers for the majority of firms. This does not mean regulation and public policies are not
important supports for training activities, it is just that, for most firms, the drivers to carry
out training activities in the first place arise from their need to respond to market forces.
Disadvantaged groups can lag behind
SMEs have lower levels of targeted training for disadvantaged groups, but for the
training they do have, the highest frequency is directed towards employees without formal
qualifications. The highest targeted training both by SMEs and large firms is for employees
without formal qualifications and employees on fixed-term contracts. SMEs offer less
training to employees at risk of losing their job when compared with large firms, and both
small and large enterprises offer little training to handicapped employees. More attention
also needs to be paid to disadvantaged groups’ skills development in SMEs.
Policy implications
Skills development is a resource intensive activity for SMEs
This study shows that for most companies, assessment of skill needs is difficult, and
is further compounded by decisions about training variables: formal versus informal;
whether or not it leads to a qualification; if it is for higher or lower skilled employees or
both. SMEs have a finite amount of resources they can dedicate to these activities,
therefore, policy interventions need to focus on areas that offer SMEs a way to systematise
their training practices. Recognising that skills development is a resource intensive activity
also means that attention must be paid to demonstrating the benefits that firms will
accrue by participating in training activities – in other words, the returns on their training
and skills development investments. Public investments in training activities are also finite
and should focus on areas where the return on public investment is highest.
Specific actions include:
●
20
Co-ordinating public policy across local, regional and national levels in order to avoid the
confusion experienced by SMEs in identifying their training needs and assessing the best
options for their businesses.
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OVERVIEW OF TRAINING AND SKILLS DEVELOPMENT IN SMES
●
Including evidence gathered from previous programme evaluations and/or pilot studies of
the costs and benefits of training activities, as part of advice and activities provided to SMEs.
●
Encouraging co-investments by the businesses receiving publicly funded training advice and
activities. These co-investments include both financial and in-kind activities (these could
include providing advisory services, evaluating publicly funded activities in which they have
participated). Incorporating some private cost components, either financial or in-kind, into
the provision of training advice and activities encourages firms to apply investment
decision-making to their training activities. This in turn will provide market pressure to the
provision of training advice and activities because, if SMEs are assessing training activities
on this basis, they will only use activities that deliver returns on their investment.
Accessing the potential for skills development via informal training
The central policy implication emerging from the TSME study is that there needs to be
a pathway for informal skills development to be recognised through qualifications, in a
similar manner to that of formal skills development. This does not mean a shift away from
the provision of formal training for employees; there are instances where formal training is
appropriate, such as in the case of apprenticeships. About 80% of the current workforce
will still be in the labour market in ten years time; they represent a central source for skills
development.2 Informal skills development represents a flexible and adaptive route for
skills development in this population.
The recognition of informal training via qualifications provides a means of achieving skills
development in an employee’s lifelong learning activities. The results of the study show clearly
that firms are using informal skills development more than formal skills development and that
they are getting better outcomes from informal activities than from formal activities.
Therefore, in order to both increase the stock and quality of skills development for SMEs, the
qualifications system needs to find a pathway enabling recognition and encouragement of
informal skills development, and also for informal skills development to be analysed as part of
the Programme for the International Assessment of Adult Competencies (PIAAC).
Encouraging firms to understand the value of “learning while doing” for both
employees and the company’s capability, and to build it more deliberately into their
business plans and related purchasing and training decisions, is one mechanism by which
to structure this type of skills development.
A re-orientation of skills development provides another mechanism. Skills
development can be understood as a spectrum of activities, and firms need to be able to
select the activities that provide the best fit for their circumstances.
Many of the barriers that confront SMEs when participating in formal training can be
alleviated through informal mechanisms of skills development. Barriers such as
identifying the right training providers, the right venue, and aligning training and business
needs are not as prevalent in informal training activities; and this is even with the lower
levels of available public resources that are invested in these types of training. Analysis of
informal training activities, such as KISA, is also in its infancy; official statistics rarely
collect information on informal training activities.
Specific areas of action include:
●
Incentives need to be provided to encourage formal training organisations and providers to develop
pathways for recognising informal skills development with qualifications. Training for SMEs is
very supply-side driven, SMEs do not have the resources or volume to demand changes
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OVERVIEW OF TRAINING AND SKILLS DEVELOPMENT IN SMES
to the training providers’ activities. Training providers need to become more responsive
to SME demand, but also need to be given the resources to achieve this. Training
providers face a competitive marketplace; if we look at this on a fee-per-student basis, a
profit margin is easier to achieve from servicing larger firms than smaller firms.
Incentives need to be provided to re-balance this dynamic.
●
Recognising informal skills development through qualifications will demand a greater role from
industry and employee organisations. One of the most often mentioned barriers stopping SMEs
from participating in training (of both types) is lack of time. Although firms can demand
more flexible training provision, they will again be time-constrained in their ability to
participate in the development of frameworks that will see the translation of informal skills
development into qualifications. However, training providers will need to receive this input
from SMEs in order to encourage them to develop such qualifications; industry associations
and employee organisations are in an ideal position to bridge this gap.
●
Further resources need to be invested in researching and understanding the dynamics of informal
skills development. Informal skills development should be a theme for the follow-up
studies of the “OECD Skills Strategy”, 3 in order to provide further evidence and
exploration of sector-based and national variations.
Allowing market forces to inform policy action
The survey results showed that the main driver for companies’ training activities was
a response to market forces, both in-house and external, within their supply chain or
industry, rather than in response to the presence of public sector skill development
programmes. This of itself does not negate the need for government intervention in the
provision of training support; there are many reasons around both market failure and
public good where the market does and will continue to provide suboptimal training and
skills development, particularly for marginalised groups or individuals.
However, where a public policy intervention has the objective of requiring an action
from SMEs, understanding why and when firms are likely to act is important. Policy needs
to be able to intervene at the points where SMEs are making decisions about skills
development and training activities within their firms. These points will be different to the
decision points for employees seeking skills development. Where possible, public sector
activity that is aimed at increasing SMEs’ participation in skills development activities
should target market failure areas for SMEs (i.e. lack of information and incentives for
training providers to offer customised training for SMEs) rather than public good objectives
(i.e. training of employees in SMEs).
In all cases, policy interventions should be accompanied by rigorous evaluations that
can show the impact of policy interventions against objectives and provide important
evidence to SMEs of the value of their training investments. The purpose of evaluation is
not to ensure positive results, but to ensure lessons are learned and these are
communicated. Policy innovation will be required to develop adequate responses to the
challenges of this field; as with any innovation, failure is part of the process, however, as
long as learning outcomes are recorded, no innovation is a failure.
Specific actions include:
●
22
The development of a framework for acknowledgement of informal skills development
through qualifications is the most desired intervention from SMEs participating in this
research. Co-ordinated action in this direction is required from policy makers.
SKILLS DEVELOPMENT AND TRAINING IN SMES © OECD 2013
OVERVIEW OF TRAINING AND SKILLS DEVELOPMENT IN SMES
●
Policy interventions should be accompanied by rigorous evaluations that can show the
impact of policy interventions against objectives, and provide important evidence to
SMEs of the value of their training investments.
●
Evaluations should be designed to encourage policy innovation, not prevent it through
risk averseness. The purpose of evaluation is not to ensure positive results, but to ensure
lessons are learned and these are communicated.
Allow for a local response, but demand a uniform focus on productivity enhancing skills
The characteristics of skill development are different across local areas and regions
and are strongly influenced by industrial concentrations and existing skill levels. The
regional workshops, combined with the survey analysis, revealed the importance of the
local context in collaborations between skills development activities in firms and training
organisations.
However, there are some fundamental skill competencies around productivity,
entrepreneurship and, increasingly, green skills, that should be foundation skill sets for all
firms. Local customisation should be encouraged to meet specific local needs, but not at
the expense of these foundation and highly transferrable skills.
Specific actions include:
●
The design and dissemination of skills audits and other assessment tools to enable
systematic and continuous advice to SMEs. Increasing participation in productivity
enhancing skills should be a focus.
●
Allow customisation of the above tools by members of regional skill ecosystems
(including local networks, value-chain partners, business organisations, trade unions
and other public agency intermediaries) to provide a varied local response.
●
Local skill ecosystems – partnerships between training providers, local authorities,
industry representations, trade unions and other labour market providers – have the
ability to combine a diverse range of policy instruments that come from regional, national
and supra-national sources and make them fit-for-purpose in their local community. This
role is not widely recognised or resourced within the wider policy community and
progress (including the below “community of practice” recommendation) should be made
to improve this.
Establishing a community of practice
The need for regional customisation should be supported by a common platform of
knowledge of how SMEs use training to develop skills within their workforces and what
works, does not work and is best practice activity across different regions. Understanding
both variation and best practice is an important task for policy makers, as it will allow
them to select a mix of activities to encourage skills development in their particular
circumstances and understand how and why these activities may encourage skills
development in SMEs.
The establishment of a community of practice of regional skills development for
knowledge sharing between regions will allow for the transmission and interpretation of
best practice evidence.
SKILLS DEVELOPMENT AND TRAINING IN SMES © OECD 2013
23
OVERVIEW OF TRAINING AND SKILLS DEVELOPMENT IN SMES
Specific actions include:
●
Establish a web-based community of practice platform, to enable information and
knowledge sharing between regions and countries
●
Use the forthcoming “OECD Skills Strategy” as a vehicle to disseminate information,
latest research and best practice among members of the community of practice.
Outline of the rest of the report
The report is divided into two parts. Part I presents the results of the cross-country
analysis of the case studies including:
●
Chapter 1, country comparisons using official statistical sources for SME training activities.
●
Chapter 2, country comparisons of SME participation in formal and informal training and
skills development from the TSME survey.
●
Chapter 3, participation in SME training according to other business characteristics such as
sector, innovation and export orientation.
●
Chapter 4, best practice in SME training and skills development from the TSME case studies.
●
Chapter 5, cross-country analysis of SME training and skills development ecosystems,
including identification of key elements at the local level.
Part II of the report presents key highlights from the country case studies in chapters
six through to eleven.
Notes
1. This document and any map included herein are without prejudice to the status of or sovereignty
over any territory, to the delimitation of international frontiers and boundaries and to the name of
any territory, city or area.
2. OECD Skills Strategy (OECD, 2011).
3. Recognising the complexity of skills policies on the one hand and the potential for peer learning
given the diversity of approaches to skills policies on the other, the OECD has developed a global
Skills Strategy, aiming to integrate the data and knowledge about skills from different work areas
across the Organisation and to support countries in identifying the strengths and weaknesses of
their national skills policies and developing better skills policies for economic growth and social
inclusion.
References
Lal, K. and T. Dunnewijk (2008), “Entrepreneurship and Innovation Strategies in ICT SMEs in Enlarged
Europe (EU25)”, UNU-MERIT Working Paper Series, No. 2008-016, United Nations University-MERIT,
Maastricht.
OECD (1999), OECD Economic Outlook, Vol. 1999/1, OECD Publishing, Paris, http://dx.doi.org/10.1787/
eco_outlook-v1999-1-en.
OECD (2003), OECD Employment Outlook 2003: Towards More and Better Jobs, OECD Publishing, Paris, http:/
/dx.doi.org/10.1787/empl_outlook-2003-en.
OECD/Statistical Office of the European Communities, Luxembourg (2005), Oslo Manual: Guidelines for
Collecting and Interpreting Innovation Data, 3rd Edition, The Measurement of Scientific and
Technological Activities, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264013100-en.
OECD (2006), Skills Upgrading: New Policy Perspectives, OECD Publishing, Paris, http://dx.doi.org/10.1787/
9789264012516-en.
OECD (2011), Towards an OECD Skills Strategy, OECD Skills Strategy, OECD, Paris.
24
SKILLS DEVELOPMENT AND TRAINING IN SMES © OECD 2013
PART I
Cross-country analysis of skills
development approaches
in SMEs
SKILLS DEVELOPMENT AND TRAINING IN SMES © OECD 2013
Skills Development and Training in SMEs
© OECD 2013
PART I
Chapter 1
Formal training and skills
development: The state of play
by
Cristina Martinez-Fernandez and Samantha Sharpe
This chapter analyses formal training activities within small and medium sized
enterprises (SMEs). It is anticipated that across Europe, most new jobs will be
within knowledge and other skills intensive jobs. Results of the Continuing
Vocational Training Surveys over the last few years are analysed, to determine
levels of participation by small, medium and large firms in training and skills
development activities, and the potential effects these training programmes will
have on the future competitiveness of the SMEs. Areas investigated include: initial
Vocational Education and Training (VET), specifically apprenticeships; and
continuing VET (primarily that financed by the workplace).
From these results, policy implications are suggested, which are designed to enable
SMEs to utilise the findings to develop or improve their current training regimes,
and to draw the attention of government agencies to how best to positively influence
these companies.
27
I.1.
FORMAL TRAINING AND SKILLS DEVELOPMENT: THE STATE OF PLAY
Company size and training activities
Company size is an important determinant of the level of participation in workforce
development, specifically of labour force training and skills upgrading activities.
Consistently, data across OECD countries show that SMEs participate 50% less in training
activities than large firms. Drivers for these lower levels of participation include a lack of
critical mass within the firm enabling them to afford (both financial costs and the cost of
employees’ time) and access formal training opportunities. Instead, SMEs are more inclined
to participate in knowledge intensive activities as a way of learning new techniques or new
ways to operate. This includes learning by interacting with consultants, suppliers or clients;
or attending conferences, meetings or internal activities such as quality control activities.
These activities, however, do not carry formal qualifications or standard training certificates
and tend to benefit managers, business owners and the higher educated staff members.
This chapter analyses formal training activities within SMEs, drawing on official
statistics, as part of the Leveraging Training and Skills Development in SMEs (TSME)
project.1 As formal training activities, particularly those activities leading to recognised
qualifications, are more easily captured through official statistical collections, this chapter
focuses more closely on these. Chapters two and three provide detailed results from a
specially designed SME training survey conducted in six OECD countries; Belgium, the
United Kingdom, Turkey, New Zealand, Poland and Canada. This survey focuses more
closely on informal/alternative training activities and the outcomes for which firms are
looking and have achieved from their training activities.
Box 1.1. Defining formal and informal training
Formal training refers to learning that occurs in an organised and structured environment
(e.g. in an education or training institute or on the job) and is explicitly designated as
learning (in terms of objectives, time or resources). Formal learning is intentional from the
learner’s point of view. It typically leads to validation and certification.
Informal training refers to learning resulting from daily activities related to work, family
or leisure. It is not organised or structured in terms of objectives, time or learning support.
Informal learning is, in most cases, unintentional from the learner’s perspective.
Source: Cedefop (European Centre for the Development of Vocational Training) (2010), Jobs in Europe to become
more knowledge and skills-intensive, Cedefop Briefing Note, February 2010, Cedefop, Thessaloniki (Pylea).
According to a recent report by Cedefop (European Centre for the Development of
Vocational Training), Europe will generate around seven million jobs net (job creation
minus job losses) by 2020. Most of these new jobs (8.5 million plus) will be in knowledge
and skills intensive occupations, meaning that the demand and need for skills (including
formal training and qualifications) will continue to rise (Cedefop, 2010). The recognition of
the growing importance of more and more skills is in contrast to the fact that enterprises
28
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I.1.
FORMAL TRAINING AND SKILLS DEVELOPMENT: THE STATE OF PLAY
with less than 50 employees provide significantly less employee training than larger firms
(OECD, 2008, 2010). This remains true even for countries known for their strong training
cultures, such as Denmark, the Netherlands, Norway and Sweden (OECD, 2010).
Box 1.2. Defining vocational education and training
Vocational education and training (VET) includes education and training programmes
designed for, and typically leading to, a particular job or type of job. It normally involves
practical training as well as the learning of relevant theory. It is distinct from academic
education – for example mathematics, which is relevant to a very wide range of jobs. In the
United States the usual term for vocational education and training is career and technical
education (CTE). Education and training for some high level professions such as medicine
and law meets the definition of VET but are not normally described as VET.
Initial VET includes programmes mainly designed for and used by young people (aged 30
and under) at the beginning of their careers and commonly before entering the labour
market. It includes many upper secondary and tertiary programmes. Continuing VET are all
other types of VET, including enterprise training of employees and training provided
specifically for those who have lost their jobs.
These definitions and distinctions inevitably leave some blurred edges, since programmes
can meet some of the relevant criteria but not all of them (for example, programmes
designed for direct labour market entry but which rarely result in that outcome).
Source: OECD (2009), Learning for Jobs, Initial Report, OECD, Paris.
Continuing VET (CVET) can be further refined into categories on the basis of how the
training is funded (by individuals, by public authorities, or by enterprises). This study is
interested in training that is provided in the context of the work environment, therefore,
the focus of this report is on this third category of Continuing VET – in which the training
is in part or wholly financed by the company, and/or conducted by employees as part of
their paid employment. Apprenticeships, which fall into the Initial VET category, are
however, an important source of employee funded and conducted training, especially for
SMEs. Therefore, discussion of this form of initial training is also presented.
One of the principal sources of data on Continuing VET within enterprises, including
SMEs in Europe, is the “Continuing Vocational Training Survey”, CVTS for short. The CVTS
is conducted every five years, previous survey years are 1995 and 2000. The following
analysis is taken from the 2005 survey, CVTS3.2 CVTS collected data on Initial VET for the
first time in 2005. Data collected on the activities of SMEs are rare, making these data
valuable forms of analysis into the training activity behaviour of SMEs.
Other OECD countries collect data on the training activities of firms within their
country. While these data sources are not directly comparable, they provide evidence of the
effect the size of the firm has on the likelihood that firms will participate in, and provide
vocational training to, their staff. This report presents data collected through CVTS and
other OECD sources.
SME participation in vocational training3
Figure 1.1 shows the CVET participation rate for both the 1999 and 2005 CVTS. There is
little change in the overall rate of participation in the EU region for SMEs between the two
SKILLS DEVELOPMENT AND TRAINING IN SMES © OECD 2013
29
I.1.
FORMAL TRAINING AND SKILLS DEVELOPMENT: THE STATE OF PLAY
Figure 1.1. Participation rates of enterprises by size in Europe (1999 and 2005)
European Union (27), 2005
European Union (25), 2005
European Union (15), 1999
1.0
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
10-19 employees
20-49 employees
50-249 employees 250-499 employees 500-999 employees
1 000 or more
employees
Source: EU Continuing Vocational Education and Training Survey 2009 *Survey year 2005 and EU Continuing
Vocational Education and Training Survey 2004 *Survey year 1999.
surveys. The figures do show a small percentage decrease in CVET participation within
large firms with 250-500 employees and the later two categories of large firms. The next
CVTS survey in 2011 will indicate how this trend evolved and the financial crisis’ impact on
participation rates.4
Figure 1.2 shows the percentage rate of firms participating in CVET by size of firm in
Europe. 5 Small firms (defined as firms with 10 to 49 employees) have the lowest
participation rates in CVET across all of the countries. Large firms (defined as firms with
more than 250 employees) have the largest rates of participation in CVET. There is,
however, significant difference between countries in the CVET participation rates of firms
depending on the size of the firm.
Figure 1.2. Participation in vocational training by size of firm in Europe (2005)
Small enterprises
Medium enterprises
Large enterprises
Total training enterprises
100
90
80
70
60
50
40
30
20
10
Au
s
Be tr ia
lg
C z B ium
e c ul g
h
Re ar i a
pu
b
D
Eu
en li c
ro
m
p
ar
Eu e a
r o n U E s to k
pe n n
an ion i a
Un ( 2
io 5)
n
(2
Fi 7)
nl
an
Fr d
a
Ge nce
rm
a
Gr n y
ee
Hu c e
ng
a
Ir e r y
la
nd
It a
l
La y
Li t vi
t
L u hu a
xe a n
m ia
bo
ur
Ne M g
a
th lt
er a
la
n
No ds
rw
Po ay
l
Po and
r tu
Sl
o v Ro m g a l
ak
Re a ni a
pu
Sl bli c
ov
en
i
Sp a
Un
a
i t e S w in
d ed
K i en
ng
do
m
0
Source: EU Continuing Vocational Education and Training Survey 2009 *Survey year 2005.
30
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FORMAL TRAINING AND SKILLS DEVELOPMENT: THE STATE OF PLAY
From analysis of the CVTS3 data (shown in Figure 1.2), in the small firm category,
Greece had the lowest level of CVET participation, with only 16% of small firms engaging in
CVET. Other countries with low levels of CVET undertaken by small firms include Bulgaria
(24%), Poland (27%), Italy (29%) and Latvia (31%). At the other end of the scale, the United
Kingdom had the highest level of CVET participation by small firms – with 89% of small
firms listed as undertaking CVET enterprises. Norway (86%), Denmark (83%), Finland (73%)
and Sweden (74%) also had high levels of participation.
For medium sized firms, the rate of participation in CVET increases. Greece again has
the lowest rate of participation with only 39% of medium sized firms in the CVTS
nominating that they participated in CVET. All other survey countries had rates above 40%
and in most cases above 50% (with the exception of Bulgaria with 44%). The United
Kingdom medium-sized firms also display high levels of participation (92%), but France has
the highest level of participation (98%) and several other countries had participation rates
above 90%, including the Czech Republic (93%), Denmark (96%) and Sweden (95%).
These results suggest two main findings. Firstly, that the rate of CVET participation in
small firms is influenced strongly by country specific variables, potentially policy mechanisms.
Secondly, that the participation rate of medium sized firms highlights the impact of increasing
organisation size on CVET as well as country specific variables, i.e. that once firms become a
certain size (more than 50 employees), this triggers increased participation in CVET.
The CVTS did not survey microfirms, or firms with less than ten employees. This means
that for the majority of firms in OECD countries, no standardised source of data is available
to assess microfirms’ participation in training. The latest National Employer Skills Survey for
England (NESS) in 2009 surveyed 79 000 employers on their training activities. This survey
includes microfirms (firms employing two or more employees) as part of their sample.
The NESS survey does not use the same categories of business size, and collects
information on training based on the place of training (i.e. on-the-job training or off-thejob training), but the results for the smallest firms, microfirms, are clear. Almost half of
firms with two to four employees (45%) participated in no training during 2009, with a
further 16% only conducting on-the-job training (NESS, 2009). Importantly, the results also
show that these smallest firms also have the highest levels of off-the-job training across all
the company size categories.
Types of vocational training provided
The CVTS asked companies questions about the type of CVET training they provided or
participated in during the reference year (2005). CVET includes training in the form of
courses, but also activities such as: attending conferences, workshops, lectures and
seminars;6 job rotations and secondments;7 learning and quality circles;8 self learning;9 and
training at workstations.
Figure 1.3 shows that continuing vocational training courses were the most popular
type of CVET used by firms of all sizes. More than 50% of large firms also used conferences,
workshops, lectures and seminars, and training at workstations to provide CVET to
employees. SME firms also favoured these methods, although at lower usage levels.
More internally focused and organised CVET such as job rotations, learning and
quality circles, and self-learning were used extensively in larger firms, but not often used
in SMEs (less than 20%). This implies that with these forms of CVET there may be a need
for a certain critical mass of employees in order to make it viable.
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FORMAL TRAINING AND SKILLS DEVELOPMENT: THE STATE OF PLAY
Figure 1.3. Types of vocational training by size of firm in Europe (2005)
Small enterprises
Medium enterprises
Large enterprises 250+ employees
Large enterprises 1 000+ employees
% of firms
100
90
80
70
60
50
40
30
20
10
0
CVET courses
Conferences,
workshops, lectures
and seminars
Job rotation,
exchanges
or secondments
Learning/quality
circles
Self-learning
CVET at work station
Source: EU Continuing Vocational Education and Training Survey 2009 *Survey year 2005.
Participation in initial VET
Apprenticeships are one of the oldest and most established forms of initial vocational
education, typically involving a contract for a period of two to four years leading to a formal
qualification. During this period the apprentice receives formal training as well as on-thejob training and experience (OECD, 2009).
Figure 1.4 shows apprentices as a percentage of the labour force. The figure demonstrates
that there are national differences in the number of apprentices. This can be traced back to
very different institutional arrangements for apprentices. For example, in Switzerland, the size
of the firm can affect the conditions of the training provision; in smaller firms an apprentice
and master training relationship predominates, whereas in larger enterprises, apprentices
spend up to 40% of their time in special workshops and training centres.
Figure 1.4. Apprentices as a percentage of the labour force
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
es
m
at
St
d
i te
Un
Un
i te
d
Ki
Fr
ng
an
do
ce
k
De
nm
ar
ay
No
la
er
Ne
th
rw
s
nd
d
an
nl
Fi
li a
ra
st
Au
ria
st
Au
y
an
rm
Ge
Sw
it z
er
la
nd
0
Source: NCVER (2005) using US Department of Labour and Cedefop data.
32
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In Australia, there is also evidence that the number of apprentices increases with the
size of the firm, with larger firms having a higher frequency of apprenticeships. More than
90% of microfirms (five or less employees) and more than 86% of firms with 10-19 employees
do not have any apprentices, whereas 48% of larger firms (100+ employees) have apprentices
in their enterprise.
Reasons firms may not provide training
When companies that did not participate in training were asked the reasons why they
did not, responses were similar across companies of all sizes, as shown in Figure 1.5. The
main reasons given for not participating in CVET were:
●
The existing skills and competence of the persons employed corresponded to the
current needs of the enterprise.
●
People were recruited with the skills needed. This suggests that for non-training
enterprises, recruitment rather than training provides the skills set for the firm. This
strategy may prove adequate for industries with stable knowledge bases, but would not
be appropriate for industries with rapidly evolving or changing knowledge bases.
Figure 1.5. Reasons for not providing training (Europe, 2005)
Small enterprises
Medium enterprises
Large enterprises
% of firms
100
90
80
70
60
50
40
30
20
10
0
The existing skills More focus
Difficult
on IVT
to assess and competences
than CVT
of the persons
enterprise’s
employed
needs
corresponded
to the current needs
of the enterprise
Lack of suitable Major training
CVT courses effort realised
in the market in a previous year
No time
People recruited Too expensive
with the skills
needed
Other reasons
Source: EU Continuing Vocational Education and Training Survey 2009 *Survey year 2005.
The next two reasons given for not participating in CVET were, “no time” and “too
expensive”. Surprisingly, the cost of training was more an issue for large firms that small
firms, however, it is possible that this is more a reflection that there are only a small
number of large firms that are non-training enterprises.
Other reasons given for non-training include: the difficulty in assessing the
enterprise’s needs and hence the training needs; the firm having more focus on Initial VET
(apprenticeships) than CVET; or that the firm had conducted a major training effort in the
year prior to the survey reference period. In most cases, these reasons attracted less than
10% of responses.
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From this chart, a number of conclusions can be drawn. Clearly, all firms that do not
participate in continuing vocational education do so because they believe they either
already have or can recruit the skills their firm requires. Although the percentage response
rates across the three categories of company (small, medium and large) are much the
same, we know from analysis presented earlier (Figure 1.4) that many more large firms
engage in CVET compared with SME firms. Thus, while the response rates outlining
reasons for not providing training may be similar, for large firms, they only reflect the
results of a much smaller number of firms; there are many more SMEs that rely on
recruitment to procure skills than there are large firms doing this. When this analysis is
examined in the context of figures discussed earlier regarding the future projected job
growth areas (knowledge and skills intensive occupations), and the skills shortages that
will occur in these areas, SMEs are going to be less able to rely on recruiting staff with
required skills in the future, because there will be more competition for these skilled
people in the labour market.
The response, “difficult to assess enterprise’s need” attracted less than 10% of
responses. This could suggest two alternatives: either firms (particularly SMEs as we are
referring to a larger sample) have no difficulties assessing their future skills needs; or, SMEs
who are not providing CVET and are instead relying on recruiting skilled staff have not had
to properly assess their skills needs in regard to training. With a competitive labour market
for knowledge and skills intensive employees this scenario may change in the future. Skills
needs assessments and the provision of CVET within a business are not activities that
firms can pick up overnight. Firms need to develop skills and dedicate resources to CVET
over a period of time in order to capture the benefits of CVET activities.
Processes of training provision in firms
This section looks in greater detail at the processes of training provision in firms that
did provide CVET. These processes include: the use of tools; both internal and external
providers of training; and the degree to which training is formalised within the firm. The
CVTS asked companies questions regarding their use of training plans, training centres,
and the types of resources provided within the firm (training budgets and dedicated
personnel) for CVET.
There are clear differences in firms’ use of a training plan based on company size, with
28% of small firms, 47% of medium firms and 70% of large firms using training plans to
guide their provision of training to their employees. Policy instruments that facilitate the
development of this role in SMEs could offset the lack of dedicated resources to training
management.
These differences are also reflected in the firms that had dedicated human resources
responsible for organising and/or delivering training within the firm. Across the EU27
region, 36% of small firms, 52% of medium firms and 73% of large firms had dedicated
people within their organisation to manage CVET. Across the EU27 region there was also
significant variation between countries in the use of specific human resources (HR)
training resources. Firms in Italy, Luxembourg, Portugal and the United Kingdom showed
higher levels of dedicated HR for training activities than other countries. However, in the
case of Italy and Portugal, this should be viewed within the context of low SME training
rates reported earlier.
34
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There is also evidence from Australia confirming this variation in quality of training
according to the size characteristics of the firm. Research suggests that small firms are
unlikely to have dedicated training staff (Hawke, 1998) and training offered tends to be
unplanned (Vallence, 1997), informal and company specific (Seagraves and Osborne, 1997).
While workplace training needs to yield benefits to employers in order to encourage them
to offer sufficient training places, it should not be so organisationally specific that it
inhibits future professional mobility (OECD, 2009).
When looking at the external resources of which firms make use for the provision of
CVET, such as external training centres for the provision of all or part of CVET, or the use of
external advisory services to provide training, the same characteristics related to size of
firm exist, but not to the same extent. In the use of external resources, it might be expected
that SMEs would seek to use external resources to overcome the critical mass/size
liabilities that may limit their ability to offer training to their staff. However, this did not
prove to be the case. Of all the enterprises that provided CVET, only 13% of small firms and
18% of medium firms made use of an external training centre for part or full provision of
this training, compared with 24% of large firms. There were some notable differences: in
Denmark, 56% of small and 78% of medium firms used external training centres; and in
Italy the usage figures were also high, with 29% of small firms and 39% of medium firms
utilising external training centres.
The results of the use of external advisory services were more even, as shown in
Figure 1.6. Indeed, 38% of small firms used external advisory services occasionally to meet
their CVET needs, with a further 18% using them on a more frequent basis (often or
always). 43% of medium sized firms used these services occasionally, with a further 20%
using them more often. When compared with large firms (46% occasionally and 26% more
frequently), there is not the same large degree of difference seen in other CVET data. This
suggests that external training resources are viable tools for SMEs in providing CVET.
Figure 1.6. European training enterprises using external advisory services (2005)
Always
Often
Occasionaly
% of training enterprises
50
45
40
35
30
25
20
15
10
5
0
Small enterprises
Medium enterprises
Large enterprises
Source: EU Continuing Vocational Education and Training Survey 2009 *Survey year 2005.
Assessing skills requirements and undertaking training planning
This section presents data regarding how firms assess their training needs, and plan for
training and skills development in the future. Figures 1.7 and 1.8 show the percentages of
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FORMAL TRAINING AND SKILLS DEVELOPMENT: THE STATE OF PLAY
Figure 1.7. Percentage of European enterprises assessing staff training needs
(2005)
Always
Often
Occasionaly
% of training enterprises
40
35
30
25
20
15
10
5
0
Small enterprises
Medium enterprises
Large enterprises
Source: EU Continuing Vocational Education and Training Survey 2009 *Survey year 2005 (Eurostat 2009).
Figure 1.8. Percentage of European enterprises assessing future skills needs (2005)
Always
Often
Occasionaly
% of training enterprises
35
30
25
20
15
10
5
0
Small enterprises
Medium enterprises
Large enterprises
Source: EU Continuing Vocational Education and Training Survey 2009 *Survey year 2005 (Eurostat 2009).
firms that assess the current training needs of their staff and the future skills requirements
of the firm, and the frequency of this assessment. Company size characteristics again appear
to be an influential force on current and future training and skills assessments.
Almost two-thirds of small firms (60%), 72% of medium sized firms and 82% of large
firms in the EU27 region undertake assessments of the current training needs of their staff.
Similarly, just over half (51%) of small firms, 65% of medium sized firms and 79% of large
firms assess the future skills needs of their firm. Although these statistics point to the fact
that a majority of firms of all sizes assess their current and future skills needs, what is
telling about the differences between the company size categories, is the frequencies with
which these assessments are being made. In SME firms, these assessments are more likely
to be occasional, whereas in large firms these assessments are routine and happen with
regular frequency. The assessment of both current and future skills needs shows the level
36
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of preparedness that firms have to deal with industrial evolution and changing patterns of
knowledge. Ad hoc or incidental skills assessments put SMEs in a weakened position for
dealing with such changes.
However, when the reasons influencing the scope of firms’ CVET activities are analysed,
the lowest stated influence factor for SMEs is difficulties in assessing the skills needs of the
firm. It also appears that size of the firm has little influence on the factors stated by firms as
influencing the scope of their training activities. The twin factors of “no time” and “no need”
rated the highest in each of the different company size categories, followed by “too
expensive” (with more larger than smaller firms giving this response), while “lack of suitable
training” was listed by more than 20% of firms in each of the size categories.
Effect of public policy measures
This section looks at the influence of public policy measures on firms’ training
activities. In the CVTS, participating firms were asked about the positive impact of certain
public policy measures on their training activities. Figure 1.9 shows the results for the three
company size categories.
For SMEs across the EU27 region, the most powerful public policy actions that
impacted (positively) on their training activities were: the provision of recognised
standards and frameworks for qualifications and certificates; and financial subsidies in
covering the costs of training. These were also the most influential factors for large
businesses, but at much higher percentage levels (provision of recognised standards and
frameworks was listed as having a positive impact on training activities in 32% of large
firms compared with 18% of small firms and 23% of medium sized firms).
Figure 1.9. Public measures’ impacts on training for European enterprises (2005)
Small enterprises
Medium enterprises
Large enterprises
% of training enterprises
35
30
25
20
15
10
5
0
Financial subsidies towards
the costs of training
persons employed
Publicity-funded advisory
service amied at identifying
training needs and/or
developing training plans
Provision of recognised
standards and frameworks
for qualification
and certification
Procedures to ensure
the standards of trainers
(e.g. by national registers,
assessment)
Tax relief on expenditure
on training persons
employed
Source: EU Continuing Vocational Education and Training Survey 2009 *Survey year 2005 (Eurostat 2009).
The least influential factor in all company size categories was “Publicly funded advisory
services aimed at identifying training needs and/or developing training plans”. Only 12% of
large firms, 10% of medium sized firms and 8% of small firms listed this as an important
factor influencing the scope of their training activities. Re-examination of previous data
seems to indicate that the reasons for this small level of impact may, however, be different
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across the company size categories. Because most large firms had training plans, and
regularly and formally assessed their training needs, the low rating in this instance could
suggest a lack of need for the public measure. Whereas in the case of the SMEs, which in
previous charts demonstrated lower levels of usage of training plans, and more ad hoc and
occasional skills assessments, the low level of influence of this public measure could be a
result of lack of knowledge about the measure, or lack of accessibility of the measure.
Public policy makers are also interested in targeting policy towards specific groups of
people that may be disadvantaged in the labour market. Figure 1.10 examines the targeting
of CVET by companies to specific employee groups, such as ethnic minorities, handicapped
employees, and employees on fixed term contracts or at risk of losing their job with the EU27
region. As would be expected, large firms show higher levels of provision of specifically
targeted CVET in all but one case – medium size firms have higher levels of training targeted
at ethnic minorities than do large firms (34% compared with 32% respectively).
Figure 1.10. EU27 enterprises providing focused training for specific employees (2005)
Small enterprises
Medium enterprises
Large enterprises
% of training firms
50
45
40
35
30
25
20
15
10
5
0
Ethnic minority
Fixed-term contract Handicapped employees
employees employed
on a non-regular basis
Part-time employees
Employees without
formal qualification
Employees at risk
of losing their job
Source: EU Continuing Vocational Education and Training Survey 2009 *Survey year 2005 (Eurostat 2009).
Over 40% of large firms provide specifically targeted CVET to employees without
formal qualification and employees that are at risk of losing their jobs, with a third of large
firms also providing targeted training to part-time, fixed term and ethnic minority
employees. SMEs had lower levels of targeted training, with the areas of highest activity
being directed towards employees with no formal qualifications, and employees on fixed
term contracts. National differences also exist and suggest different regulatory
requirements are placed on firms of different sizes in regards to such targeted training.
It is also interesting to note that the highest level of specific training provided by SMEs
was in regard to employees without formal qualifications, suggesting that targeted training
may be provided by employers in order to give employees formal qualifications. Referring
back to the first section and overall impetus for this research – the assumption that SMEs
were less likely to participate in CVET and, where they did participate in training, that it
was more likely to favour managers and higher skilled employees with formal
qualifications – these data provide a positive counter indication regarding the levels of
training provision for lower skilled workers to gain formal qualifications.
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Conclusions and policy implications
There is clear evidence that workforce size is an important determinant of a
company’s behaviour in relation to its participation in training and skills development. The
2005 Continuous Vocational Training Survey 3 (Eurostat, 2005) conducted by the European
Commission, showed that only 50% of small firms participated in formal CVET compared
with 90% of large firms. These figures are unchanged from the previous survey in 1999.
While there are significant national differences in CVET participation across the EU (Greek
small firms had the lowest levels of participation at 16% compared with the United
Kingdom small firms that had the highest, with 90%), in all countries, SMEs had lower
levels of CVET activity than larger firms. These results are also reflected in data from
Australia and New Zealand.
This chapter outlined some of the factors that SMEs take into account when making
decisions on staff training, specifically:
●
Internal training programmes such as learning circles, and job rotation, exchanges or
secondments have limited participation by SMEs (probably due to their lack of critical
mass) and it is therefore suggested that these firms could benefit from a network
approach, utilising members of their skill ecosystem to generate similar economies of
scale for training activities available to larger firms. For example, several SMEs could join
forces to organise learning circles or exchanges of personnel within an industry cluster
or value-chain.
●
Recruitment is the main process for introducing and updating skills in the firm. This is
an important barrier to innovation and competitiveness within firms if the sector in
which the firm operates evolves rapidly and needs to adjust its knowledge base. The
Cedefop (2010) report quoted in the introduction noted that employment growth over
the next 10-15 years will predominantly be in knowledge and skills intensive
occupations, and that the labour market for these employees will be strong. SMEs will be
less able in the future to recruit employees to fulfil their skills needs, and therefore plans
for the development of their workforce’s skills need to be part of SME’s business
operations.
●
Assessment of both current and future skills needs appear to be more casual in SMEs
than in large firms where these assessments are routine and happen with regular
frequency. This is especially critical for SMEs because, by failing to undertake skills
needs consistently and systematically, they are risking lost competitiveness in the face
of industry evolution and changing patterns of knowledge. As a consequence, SMEs
might face new market challenges in a weak position and with increasing vulnerability.
The evidence shows the critical need to assess the means and approaches for SMEs
today towards their skills development, as this may differ from traditional measures of
formal training participation.
Notes
1. The report OECD (2010), SME Participation in Formal Vocational Education and Training (VET) in Selected
OECD Countries provides greater detail of the statistical analysis.
2. CVTS3 was conducted in 2006 for the reference period of 2005. The design of CVTS3 does not
necessarily correspond with earlier versions of the survey, therefore longitudinal analysis is
difficult.
3. CVTS data does not include firms of 10 or less employees within the survey sample.
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FORMAL TRAINING AND SKILLS DEVELOPMENT: THE STATE OF PLAY
4. At the time of preparing this report, data from the 2010 CVTS, for which data is collected across
2011-12, was not available. However, data presented here is still a valid source of trends in SMEs’
participation in training.
5. The charts presented in this report primarily relate to the EU27 region unless otherwise stated.
6. Attendance at conferences, workshops, lectures and seminars are only counted as vocational
training actions if the primary purpose of an employee attending is training/learning (Eurostat,
1999).
7. Job rotation and exchanges with other enterprises are only CVET if these measures are planned in
advance with the specific purpose of developing or improving the skills of employees involved
(Eurostat, 1999).
8. Learning circles are groups of employees who come together on a regular basis with the primary
aim of learning about the requirements of workplace organisation, work performance and the
workplace itself. It is a form of individual learning within groups.
Quality circles are working groups with the aim of discussing and solving problems regarding
production and the workplace. Participants have to be integrated within the planning and
controlling procedures of the enterprise (Eurostat, 1999).
9. Self learning through open and distance learning courses, video/audio tapes, correspondence
courses, computer-based methods (including the Internet) or the use of a Learning Resources
Centre is only continuing vocational training if it is the trainee/learner who manages the training
time and the place at which the learning takes place (CVTS2, 1999).
References
Cedefop (European Centre for the Development of Vocational Training) (2010), Jobs in Europe to become
more knowledge and skills-intensive, European Centre for the Development of Vocational Training
(Cedefop) Briefing Note, February 2010, Cedefop, Thessaloniki (Pylea).
Eurostat (European Statistical System) (1999), Continuing Vocational Training Survey 2, European
Commission, Brussels.
Eurostat (2005), Continuing Vocational Training Survey 3, European C Participants in a Work based
Learning Programme: Small and Medium Enterprises ommission, Brussels.
Hawke, G. (1998), “Learning, workplaces and public policy” in J. McIntyre and M. Barrett (eds.), VET
Research: Influencing Policy and Practice, proceedings of the first national Conference of the “Australian
Vocational Education and Training Research Association”, Sydney.
NESS (National Employer Skills Survey) (2009), National Employer Skills Survey for England 2009, NESS,
London.
OECD (2008), Leveraging Skills and Training in SMEs, CFE/LEED(2008)6, OECD, Paris.
OECD (2009), Learning for Jobs, Initial Report, OECD, Paris.
OECD (2010a), SME Participation in Formal Vocational Education and Training (VET) in Selected OECD
Countries, CFE/LEED (2010)6, OECD, Paris.
Seagraves, L. and M. Osborne (1997), “Participants in a Work-based Learning Programme: Small and
Medium Enterprises and their Employees” in Good Thinking: Good Practice – Research Perspectives on
Learning and Work, 5th Annual International “on Post-compulsory Education and Training”, Griffith
University, Brisbane.
Vallence, K. (1997), “Training one-to-one: Out of sight, out of mind” in Good Thinking: Good practice –
Research Perspectives on Learning and Work, 5th Annual International Conference on “Postcompulsory Education and Training”, Griffith University, Brisbane.
40
SKILLS DEVELOPMENT AND TRAINING IN SMES © OECD 2013
Skills Development and Training in SMEs
© OECD 2013
PART I
Chapter 2
Skills development on the ground:
Formal and alternative approaches
by firms
by
Cristina Martinez-Fernandez and Samantha Sharpe
This chapter investigates forms of knowledge sourcing for skills development other
than formal approaches, including knowledge intensive service activities (KISA). A
web-based survey questionnaire was supplied to firms in the participating
countries. Analysis of the data obtained includes: skill levels of the employees (low,
medium, high); age bracket; country; preferred training methodology (vocational
education and training versus KISA); types of skills; outcomes from training by
employee, company and local region effects; effects of the financial crisis on training
activities; and motivations for skills development. Finally, policy implications
resulting from this analysis are outlined, including noting that the types of skills
development appear to be linked to the existing skill levels of employees, which is of
importance because of its potential impact upon low-skilled workers’ future
employability.
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SKILLS DEVELOPMENT ON THE GROUND: FORMAL AND ALTERNATIVE APPROACHES BY FIRMS
In-depth analysis of access to formal and alternative training activities
The Leveraging Training and Skills Development in SMEs (TSME) survey1 investigates
the training activities of firms in more detail. The survey also examines other forms of
knowledge sourcing in which firms participate in order to develop the skills profile of their
staff, such as participation in knowledge intensive service activities (KISA). In both cases,
the survey identifies the partners with which firms collaborate in these activities, and the
outcomes of the training and skills development activities.
The research provides new empirical data on the behaviour of small and medium
sized enterprises (SMEs) in training and skills development activities within their business.
In the case of microfirms (small firms of 10 or less employees), this survey also represents
one of the few data gathering opportunities for information on these firms. The majority of
national statistical collections do not count these firms among their sample populations
even though they make up a large proportion of the company population.2
The survey was guided by three research questions:
●
What are the characteristics of training activities carried out in firms, including the
distinction between formal and informal training and skills development activities?
●
What are the characteristics of the employees that received this training?
●
Is there variation between firms and employees in the training and skills development
activities they undertook, and if so, what are characteristics of the firm, employee and
training type that account for this variation?
This chapter is divided into four sections. The next section provides an overview of the
survey methodology and respondents. The sections following address the results of the
survey in relation to the first two research questions listed above. The following chapter
examines the survey results in response to the third research question.
Survey methodology
The survey questionnaire was designed in consultation with panel members and
steering committees from the participating countries (Belgium, Canada, New Zealand,
Poland, Turkey and the United Kingdom). Many of the questions regarding training and
knowledge intensive service activities have been used in numerous previous surveys
(OECD, 2006, Martinez-Fernandez and Martinez-Solano, 2006; Sharpe, 2008; MartinezFernandez and Potts, 2008). This means the questions have been tested in prior survey
settings and have a body of data against which the current data can be interpreted.
The survey was disseminated electronically via a website link to a dedicated survey
platform hosted by the OECD, except in the case of Poland where the survey was
disseminated via face-to-face interviews as this has been the most effective method in
terms of number of responses to date. Participating countries collected the sample
population from various sources, including industry databases and organisations such as
business associations, chambers of commerce, or university business databases. There
were a total of 1 037 responses to the survey.
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A limitation of using web-based surveys is self-selection, as it is difficult to determine
the representativeness of the sample compared with that of the total population of firms
due to the ability for uncontrolled circulation of the survey to occur (Batinic and
Bosnjak, 2000).
To counter-balance this potential bias, the research methodology involves multiple
methods of data collection, including:
●
analysis of previous studies of official training statistics (detailed in the previous chapter)
●
in-country case studies
●
training ecosystem workshops with training providers, training users and policy makers.
Analysis methodology
As noted in an earlier section, many questions in the survey have been previously
tested in other company-focused surveys. As a result, there is an established methodology
for interpreting responses, particularly for the KISA questions, which strengthens the
analysis. The main method of analysis for this report is comparison across countries on
tabulation of key variables, although comparisons are also made across industries and
business size for selected variables.
Definitions of types of skills
Survey results presented in the next few chapters will refer to different forms of skill
types. Definitions of these skill types3 are:
Generic skills – includes general information technology (IT) user skills, oral
communication, written communication, numeracy and literacy, office administration skills.
Routine skills – includes repetitive, more basic, low knowledge-intensive skills.
Technical/Advanced skills – skills required for problem solving; design, operation,
rethinking and maintenance of machinery or technological structures; IT professional skills.
Management skills – skills related to business planning; complying with regulations
and quality control; human resources planning (recruitment, training and skills
development); and allocation of resources.
Social skills – includes a motivation to develop, and appreciation of people’s
characteristics in relation to individual and team work; customer handling; appreciation of
networks and value-chain partners.
Language and cultural skills – ability to communicate in more than one language, and
appreciation of cultural characteristics of different ethnic groups.
Entrepreneurial skills – specific skills for start-up companies, such as risk acceptance/
management, strategic thinking, self-confidence, the ability to make the best of personal
networks, and the ability to deal with challenges and requirements of differing natures.
Characteristics of training and skills development in SMEs
Formal training and skills development
Participation
The survey results show areas of differentiation and commonality across the TSME
survey countries. The two groups of employees that appear to have the highest levels of
participation in formal training are high-skilled employees and employees aged 25-49
years old (see Figure 2.1).
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Figure 2.1. Formal training participation by various employee groups
Belgium
Canada
United Kingdom
New Zealand
Poland
Turkey
% 65+
% 50-64 years
% 25-49 years
% less than 25
% low skilled
% high/med. skilled
% of employees
0
10
20
30
40
50
60
70
80
90
100
% of firms
Source: TSME survey, 2011-12.
Conversely, low-skilled employees, and the older (50+) and younger employees (aged
under-25) appear to access much less training. The exceptions of young employees in
Turkey and low-skilled employees in Canada should both be noted. Young employees in
Turkey access the second highest amount of training within the groups in Turkey (second
only to employees 25-49 years old). Over half (54%) of Canadian low-skilled employees
participated in formal training activities; compared with 2-23% in the other countries.
The implications inherent in these results are a widening of the skills and qualifications
gap between higher skilled and prime age employees compared to younger and/or less
skilled employees. This will have consequences for future knowledge levels within the
workforce (i.e. as older workers retire) and the opportunities arise for lower skilled worker to
reposition themselves in the workforce, in line with projections centred around the
increasing knowledge intensity of developed country workforces (Cedefop, 2010).
Accredited training is the main source of formal training for employees
The quality of training can be assessed by the use of accredited trainers and whether
or not the training results in a formal qualification. The assumed association between
formal qualifications and quality product needs to be accepted with caution, however, as
the survey has also established that many training activities are undertaken on a one-off
basis, and formal qualifications are more likely to be awarded as a result of regular and
repeated training activities.
The majority of firms in all countries, always or usually used accredited trainers for
their training activities. Less than a quarter of firms reported that they never used
accredited trainers, 23% in Poland, 14% in the United Kingdom and 6% in Belgium.
In contrast, the picture around training resulting in a formal qualification is more
complex. In Belgium (53%), Canada (68%) and the United Kingdom (54%), more than half of
surveyed firms said that formal training for their employees resulted in a recognised
qualification. In Poland, companies’ responses suggest that formal training was less likely
44
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SKILLS DEVELOPMENT ON THE GROUND: FORMAL AND ALTERNATIVE APPROACHES BY FIRMS
Figure 2.2. Use of accredited trainers and formal qualifications by country
Not stated
Never
Usually
Always
% of firms
100
80
60
40
20
Accredited trainers
Total
Turkey
Poland
New Zealand
United Kingdom
Canada
Belgium
Total
Turkey
Poland
New Zealand
United Kingdom
Canada
Belgium
0
Training leading to qualifications
Source: TSME survey, 2011-12.
to result in a qualification, with 34% of firms stating formal training never leads to a
qualification, and 29% saying it did. In Turkey, only about 40% of firms responded to this
question and the results were mixed: 20% of firms stating formal training resulted in
qualifications for their employees; but 19% of firms stating training never resulted in
qualifications.
Formal training outcomes according to employee’s skill levels
The purpose of the TSME survey was to gather data on the amounts and types of
training activities being carried out by SMEs. The survey also gathered data on the returns
of these training activities for the firms, the employees involved in the training (from the
perspective of the firm), and the returns more broadly for the local area and industry.
Firms generally nominated increased technical and management skills for employees
as being the most important returns from training activity. This training activity is centred
on higher skilled employees. Table 2.1 outlines the results across the two skill level
categories. The table shows that where firms nominated outcomes from their training
activities, management skills were almost exclusively for higher skilled workers.
This high- and low-skills split was also seen in the technical skills outcomes, although
not to the same extreme extent across all countries. For example, in Canada, New Zealand
and Poland, double the percentage of high-skilled employees were gaining development in
technical skills compared with low-skilled employees. This was not the case in Turkey,
where in fact 38% of low-skilled employees had technical skills outcomes, as opposed to
only 27% of high-skilled employees.
Skills areas in which lower skilled employees had higher outcome levels were in the
areas of routine and generic skills, although the percentages of firms noting outcomes in
these areas varied across the countries. In the United Kingdom and Turkey, over 30% of
firms noted generic and routine skills outcomes from training, while for Poland and New
Zealand these accounted for less than 20%.
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Table 2.1. Outcomes of formal training in skills areas by country
%
Belgium
Canada
United Kingdom
High/med.
Low
High/med.
Low
High/med.
Low
Routine
23
13
19
17
20
48
Generic
29
12
15
11
18
52
Technical
32
19
47
14
60
Management
26
1
32
4
Social
20
7
20
Language
11
3
12
New Zealand
High/med.
Poland
Turkey
Low
High/med.
Low
High/med.
Low
4
3
17
6
16
29
1
15
14
4
8
12
14
14
0
25
5
27
38
20
2
15
1
18
2
39
6
2
16
40
11
5
20
5
23
11
5
2
6
3
1
15
5
8
5
These areas of skills outcomes are not surprising given the basic association of skills
level with higher functions within an organisation. Technical skills and social and
language skills are productivity-enhancing skills and are the hallmarks of modern
competitive firms.
Other outcomes for employees include employment progression and mobility. Higher
skilled employees listed more outcomes in the three categories covered in the survey:
employment progress, higher wages, and changing jobs. For example, in Canada 46% of
high-skilled versus 26% of low-skilled employees had outcomes for employment progress
as a result of their formal training activities. The United Kingdom is a notable exception;
low-skilled employees showed higher levels of outcomes in terms of employment progress
(20% versus 10%) and higher wages (52% and 10%) than high/medium-skilled employees.
Overall, there were fewer outcomes for both groups of employees related to changing
jobs than the other two categories.
Firms were also asked about other outcomes from skills development including
productivity, innovation and competitiveness, and whether outcomes impacted just the
company, or whether they spilled over into wider outcomes for the industry and local area
in which the firm was situated. In total, firms cited outcomes predominantly in increased
productivity, and to a lesser extent market positioning and competitiveness.
By and large, the company realised the outcomes, but the survey highlights that spillover outcomes were evident in each of these categories for the local region as well. In
Belgium, 45% of firms, and 38% of Turkish firms cited outcomes in productivity to the local
area from formal skills development activities. 20% of firms in the United Kingdom
highlighted outcomes for the local region in market positioning, and 46% for climate
change mitigation.
Importantly, it is clear that firms felt spill-overs went to the local region, rather than
being industry specific. This means that skills development activities can positively benefit
all industries in a local area, rather than being contained within an industry, which may or
may not be present in large enough numbers within a local region to provide benefits.
Training access – informal/alternative activities
Formal training activities within firms do not constitute all the activities that firms
engage in to increase the skills, knowledge and competencies of their staff. This next
section investigates alternative ways of training, which includes activities such as:
interactions with co-workers, suppliers, clients and consultants; and internal work
projects to improve company processes such as quality assurance processes. In all of these
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situations, skills and competencies are not gained through formal training programmes,
but rather through a range of interactive activities called knowledge intensive service
activities or “KISA”. KISA can explain the dynamics of training and skills development
beyond formal programmes and are associated with innovation processes in both
manufacturing and service firms (OECD, 2006; Martinez-Fernandez et al., 2011).
Participation
Participation in these activities is concentrated on high-skilled employees within the
age group of 25-49 years (see Figure 2.3). In total, between 91% (Belgium) and 43% (New
Zealand) of firms stated employees aged 25-49 years, and between 87% (Poland) and 37%
(Turkey) of high-skilled employees have participated in these activities.
Figure 2.3. Informal/alternative training participation by employee group
Belgium
Canada
United Kingdom
New Zealand
Poland
Turkey
% 65+
% 50-64 years
% 25-49 years
% less than 25
% low skilled
% high/med. skilled
% of employees
0
10
20
30
40
50
60
70
80
90
100
% of firms
Source: TSME survey, 2011-12.
Informal/alternative training activities are sourced from a range of places, however,
actors within a firm’s supply chain are most likely to be the main, and most frequently
accessed source of KISA. In New Zealand and the United Kingdom, the role of the supply
chain in KISA provision is clear, with over 50% of firms sourcing KISA from co-workers,
clients and suppliers. Figure 2.4 shows the variation in sourcing of KISA from the supply
chain within the case study areas. Firms also used other external sources of KISA, such as
consultants, other firms within the same industry or geographical cluster, and government
departments and universities. These sources were accessed in lower amounts than the
supply chain sources.
Outcomes of informal training
Outcomes for these other knowledge sourcing activities are assessed in the same way
as formal training activities: by skill outcomes; by employee outcomes; and then by
company, industry and local area outcomes. Outcomes by skills types report very similar
trends to those seen in the formal training outcomes (see Table 2.2).
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Figure 2.4. Main sources of KISA by country and skill level of employees
High/med. skilled
Low skilled
% of firms
100
90
80
70
60
50
40
30
20
10
Co-workers
Suppliers
Total
Turkey
Poland
New Zealand
United Kingdom
Canada
Belgium
Total
Turkey
Poland
New Zealand
United Kingdom
Canada
Belgium
Total
Turkey
Poland
New Zealand
United Kingdom
Canada
Belgium
0
Clients
Source: TSME survey, 2011-12.
The main outcomes are again in management and technical skills. However, whilst
the split of outcomes between high- and low-skilled employees is still evident, it is less
pronounced than in the formal training outcomes. This suggests that KISA are perhaps
used as informal/alternative methods of skilling employees at both levels without the
formal structure and costs associated with training activities. Cross-country differences
are also evident. Lower levels of activity are reported in Poland and Turkey in comparison
to New Zealand, the United Kingdom and Belgium. The areas of lowest KISA for Turkey
were generic and language skills, while the remaining areas were fairly evenly distributed.
In Poland, technical, management and social skills have the highest outcomes for
high-skilled employees. For lower-skilled employees, KISA outcomes were minimal.
Table 2.2. KISA outcomes by type and skill level of employees
%
Belgium
Canada
United Kingdom
New Zealand
Poland
Turkey
High/med.
Low
High/med.
Low
High/med.
Low
High/med.
Low
High/med.
Low
High/med.
Low
Routine
24
16
14
19
20
24
34
23
11
3
20
19
Generic
23
13
12
13
14
20
23
11
10
3
9
15
Technical
30
20
40
14
54
10
59
18
15
4
27
16
Management
20
1
28
3
56
2
72
9
13
0
27
7
Social
26
12
10
2
28
16
59
24
13
3
25
17
5
4
4
2
14
4
15
7
5
1
15
7
Language
Source: TSME survey, 2011-12.
There is a low level of awareness or focus among the respondent firms about whether
outcomes of training can impact their industry, and even less regarding the local area
(20 km radius). This result indicates that much work needs to be done at the level of system
strategies for the ecosystem in which the firm is embedded.
48
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SKILLS DEVELOPMENT ON THE GROUND: FORMAL AND ALTERNATIVE APPROACHES BY FIRMS
In the vast majority of cases, outcomes of training activities accrue to the firm. The
main outcomes for the firm are: increases in productivity; upgraded skills; and increases in
innovative activities. New Zealand, the United Kingdom and Belgium experience these
outcomes at higher levels than Poland and Turkey; in the former, usually 50% of firms
report these outcomes, whereas in the latter it is around 20-30% of firms.
Formal VET versus informal KISA skills development sources
Firms completing the survey were asked to compare both formal and informal training
activities and comment upon whether or not informal KISA were better for skills
development than formal activities (see Figure 2.5). Across all firms in all countries, KISA
were perceived as a better source of skills and competencies for 20-40% of firms surveyed.
There are differences across countries and between high- and low-skilled employees.
Figure 2.5. KISA compared to VET for skill development by knowledge area
High/med.
Low
%age of firms obtaining better outcomes from KISA
20
18
16
14
12
10
8
6
4
2
n
ee
hi
rs
eu
en
Gr
p
s
sk
al
ci
pr
tr e
ng
ua
ill
ge
al
La
hn
ic
S
Te
c
er
m
m
OH
ce
l
ga
Le
co
So
En
un
Ac
co
E-
an
f in
d
an
g
t in
sin
Bu
IT
ce
D
R&
ke
ar
M
es
sp
la
nn
in
t in
g
g
0
Source: TSME survey, 2011-12.
In activities such as business planning, marketing, research and development and IT,
companies reported better outcomes from KISA rather than VET for high-skilled workers
than low-skilled workers. In areas such as occupational health and safety (OHS), technical,
languages, and social and cultural skills, the better outcomes from KISA are more evenly
distributed among high- and low-skilled workers.
These results could suggest that it is more the type of skill that benefits more from
development through KISA rather than the type of employee. Therefore, the skills areas
that are likely to be the domain of more skilled workers such as research and development,
marketing and business planning show higher responses for high-skilled workers, whereas
skills areas that are the focus of a wider range of employees, including low-skilled
employees, are more evenly matched. How the skills development from KISA is better than
that achieved through VET is worth further exploration via the case studies.
SKILLS DEVELOPMENT AND TRAINING IN SMES © OECD 2013
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The results of KISA and VET have shown similar patterns of importance for both highand low-skilled workers, so establishing exactly how KISA better impact skills
development in these areas is essential for understanding how best to support KISA. In
terms of cross-country differences, the same patterns of higher usage of KISA in Belgium,
New Zealand and the United Kingdom compared with Turkey and Poland are again
replicated in firms’ perceptions of KISA as a better method of skills development.
Belgium has the highest percentage of firms reporting better training outcomes from
KISA than VET in social and cultural, languages, occupational health and safety (OHS),
legal, human resources (HR) and accounting skills. The United Kingdom has the highest
percentage of firms reporting better outcomes in technical, e-commerce, IT, research and
development, marketing and business planning. There could be sector-based differences
underlying these results given the different composition of sectors in the Belgium and the
United Kingdom samples. The final report will explore the effect of sector on the KISA/VET
relationship in greater detail.
Turkey shows lower levels of overall benefits from KISA versus VET, but where KISA is
seen as more beneficial, these results are evenly split between high- and low-skilled
employees. For example, Turkish firms reported better outcomes from KISA for social and
cultural skills (14% for high-skilled and 12% for low-skilled), in language skills, firms
reported better outcomes from KISA for high- and low-skilled workers – 14% and 10%
respectively. For technical skills, the percentage of firms reporting better outcomes from
KISA compared to VET was equal at 18% for both low- and high-skilled workers.
The lowest levels of firms reporting better outcomes from KISA than VET were found
in Poland. In each category except OHS and technical skills, fewer than 10% of firms
reported better outcomes. It is difficult to know from this survey if these results are
because firms actually do receive better outcomes from VET than KISA, or if the
environment for KISA’s skills transmission is less developed.
Effects of the financial crisis on firms’ recruitment and training activities
A number of questions were asked in the survey about the effect of the recent financial
crisis and associated economic downturn on firms. There was a mixed picture of training
activities in the aftermath of the global financial crisis (GFC).
For a large percentage of firms (between 50-70%), the GFC has not resulted in any
significant changes to either their recruitment or training levels. Polish and Turkish firms
in particular recorded high levels (65% and 59% respectively) of stability, reporting that the
crisis had not affected recruitment activities (including recruitment of young people and
apprentices) or affected firms’ expenditure on training activities. In particular, only 15% of
Polish firms reported increased recruitment activity, but as the previous results note, Polish
firms reported “same” for their levels of recruitment and training activities over the
previous twelve months as the year before. However, Belgian firms reported an increase in
recruitment activity (50% of firms), including increases in employment of young people
(25 years or under) of 26% and apprentices by 14%. All other countries also had a 20% or
greater number of firms increasing their recruitment activity over the past twelve months.
Results are shown in Figure 2.6.
This is not to say that firms were unaffected by the GFC; the economic impact of the
crisis was felt quickly among firms, especially manufacturing and retail service firms. We
are approaching two years since the first onset of the GFC, and these results show that a
50
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I.2.
SKILLS DEVELOPMENT ON THE GROUND: FORMAL AND ALTERNATIVE APPROACHES BY FIRMS
Figure 2.6. Impact of GFC on training activities
%
90
Belgium
Canada
United Kingdom
Poland
Turkey
Total
New Zealand
80
70
60
50
40
30
20
10
Training
Training expenditure
Informal training
Use of external trainers
Same
Increased
Decreased
Same
Increased
Decreased
Same
Increased
Decreased
Same
Increased
Decreased
Same
Increased
Decreased
0
Formal training
(leading
to qualifications)
Source: TSME survey, 2011-12.
plateau of recruitment and training activities has been reached among SME companies.
Things may not have returned to pre-GFC levels, but recruitment and training have not
declined significantly over the past year.
Skills identification in firms
For the purpose of the survey, skills needs were categorised into the same eight skills
groups as used in previous studies (OECD, 2010b, 2010c).
Future skills need identification
Future skills needs varied across country and skills type, however, management skills
were the most identified need by firms in all countries [Belgium (42%), Turkey (33%), the
United Kingdom (18%), New Zealand (14%) and Poland (7%)]. Other highly needed skills
included technical/advanced, social, and generic skills. Polish and Turkish firms reported
lower overall levels of skills needs across all categories compared to the other countries,
with the exception of technical/advanced skills in Turkey.
There is also a variety in the “degree of need” firms attached to the different skills
groups. Companies were asked to report their skills needs as “some need” or “high need”.
High skills needs included technical/advanced skills and management skills in Belgium
and Turkey, and social and generic skills in Belgium. Routine skills were, overall, the least
needed skills, although nearly 50% of Belgium firms indicated the need for these skills.
The responses on skills needs must be interpreted together with companies’ responses
regarding barriers to training activities, because the ability to assess skills and training needs
was also identified as a barrier to training activities. This means that if firms are having
difficulty in assessing their skills and training needs, then this section of the survey may not
fully capture the breadth of skills needs within the responding organisations.
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I.2.
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Motivation and collaboration for training
This section examines the motivations and incentives for organisational training
activities, either formal VET activities or informal KISA. Three categories of incentives are
examined: public incentives (such as government programmes); and two sets of market
forces: variables – private incentives (such as collective agreements with trade unions, or
industry association activities); and in-house incentives (such as the usual business drivers
of productivity, services requirements, new product development, financial and employment
constraints). Figure 2.7 shows the incentives to which firms were responding in their skills
development activities.
Figure 2.7. Incentives for skill development
Public
Private
In-house
% of firms
100
90
80
70
60
50
40
30
20
10
VET
Total
Turkey
Poland
New Zealand
United Kingdom
Canada
Belgium
Total
Turkey
Poland
New Zealand
United Kingdom
Canada
Belgium
0
KISA
Source: TSME survey, 2011-12.
Unsurprisingly, market forces were the dominant motivator for SME activity,
particularly in-house incentives, which drive the majority of skills development activities
in firms for both VET and KISA based activities. In New Zealand, Turkey, Belgium and
Canada, private incentives also outweigh public incentives for KISA activities. Public
drivers for training activities in all countries were more evident for VET activities than KISA
activities, except for firms in the United Kingdom, where 68% of firms’ KISA activities were
in response to public policy drivers.
Table 2.3 further examines the in-house motivations for skills development activities.
The main reasons reported by firms regarding skills development centre on the product
offering of the firm or the skill levels of employees.
In Poland, firms were mostly motivated to undertake skills development for in-house
reasons, particularly the need to increase employees’ skills levels, and reorganise the
operations of the firm, with 61% and 59% of Polish firms citing these reasons, respectively.
In Turkey, in-house reasons came specifically from product requirements (65%) and
the need to increase employee skills levels (73%). Employee skills levels (79%) and position
52
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SKILLS DEVELOPMENT ON THE GROUND: FORMAL AND ALTERNATIVE APPROACHES BY FIRMS
Table 2.3. In-house motivations for skills development activities
%
Belgium
VET
Canada
KISA
VET
KISA
United Kingdom
New Zealand
Poland
VET
KISA
VET
KISA
VET
Turkey
KISA
VET
KISA
Production needs
18
7
62
64
8
76
24
53
17
5
62
29
Service requirements
26
36
62
19
40
0
59
19
44
12
24
36
New product development
12
66
33
51
32
0
55
23
27
8
28
31
Financial adjustments
4
86
25
17
26
4
36
38
14
5
12
51
Climate Change impacts
2
88
15
13
42
8
4
18
4
1
9
55
14
62
34
44
56
16
16
49
46
12
10
53
Job adjustments
Source: TSME survey, 2011-12.
reorganisation (71%) within the firm were also the top motivators behind Belgium firms’
skills development activities. In addition to employee skills needs, product and service
requirements were the main drivers of skills development in the United Kingdom; with
70% of the United Kingdom firms listing new product development as a motivation, 68%
listing service requirements, and 60% citing production needs. New Zealand displayed a
similar pattern to the United Kingdom.
It is important, at this stage, to remember the context for this survey – one of the worst
and most prolonged economic downturns in recent history. SMEs have been battling for
survival in the past few years, and as the earlier results on the impact of the crisis showed,
by and large they are surviving. However, there can be no doubt that all business expenditure
is being evaluated in terms of its contribution to organisational productivity and growth in
the current climate.
Understanding the impact of public motivations for skills development in firms is
naturally important for policy makers. Many KISA’s skills development activities are
motivated by public incentives. This patently shows that public institutions have a clear
role to play in fostering KISA based skills development in firms. The survey also shows that
it is at the national level, i.e. from country-specific programmes, that firms draw the most
motivation for KISA skills development; this is particularly the case in Belgium, where 58%
of firms reported national level incentives for their KISA activities.
The regional and local level companies are more likely to incentivise VET activities
than KISA, although in some cases VET and KISA are equal, such as at the regional level in
the United Kingdom and the local level in New Zealand.
At the supranational level, the results are mixed across the countries. In Turkey,
supranational programmes are seen as motivating KISA activities in 24% of firms, but in
Poland it is only 1%. Also, in Belgium 18% of firms report that supranational policies and
programmes motivate VET activities; in the United Kingdom it is 12%; and in New Zealand
it is 3%. Obviously the European Union has a much bigger impact on activities in European
firms than Asia-Pacific organisations do on New Zealand firms, thus the level of
supranational organisational structure is not equal in the two regions.
Conclusions and policy implications
The results presented in this chapter provide further evidence of the training
implementation processes of SMEs. They show that access to training across skill levels
within firms appears to be generally equal; however, it is in the type of training accessed
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SKILLS DEVELOPMENT ON THE GROUND: FORMAL AND ALTERNATIVE APPROACHES BY FIRMS
that real differences between low- and high-skilled employees emerge. These differences
exist over both VET and KISA skill development activities for low-skilled employees within
the main areas of training, but appear overall to be more pronounced in VET.
The main areas of skill development for low-skilled employees are in generic and
routine skills, OHS and IT skills. The main skill development areas for high-skilled
employees are technical skills, and management skills.
In many respects, these areas of skill development match the job functions of
employees, such as management skills for high-skilled employees, as these would be the
usual employees fulfilling this job function within firms. Where there is room for concern
is when skills development in areas that are or have the potential to be widely demanded
in the future is mismatched between high- and low-skill employees, as this has the
potential to negatively affect low-skilled workers and their future employment potential.
High-skilled workers appear to have more complex knowledge sourcing and skill
development activities than low-skilled workers, and the training activities that they
complete provide more immediate inputs into the productivity of the firm. This is even
more evident when examining informal training activities, where skills development is
focused on technical, management, entrepreneurship and green skills (discussed further
in the next chapter). Here again the areas that add most to firms’ productivity are also the
areas where higher skilled workers are accessing the most training and providing the
outcomes of that training to their employers; areas such as business planning, marketing,
research and development, entrepreneurship and green skill development.
For low-skilled employees, similar numbers of firms noted better outcomes in
productivity enhancing skills sets such as technical skills from KISA than VET. The other
areas where skill outcomes from KISA were noted as better than VET are OHS, languages,
and social and cultural skills. The results for both VET and KISA low-skilled worker
participation levels show concentrations in these same areas across both VET and KISA.
These results show that skills development in productivity-based skills areas for lower
skilled employees can be achieved from KISA.
The case study analysis in Chapter Six unpacks further the relationships between
KISA and VET, examining how skills development between the two differs. In light of this
knowledge, it will be possible to better understand why it is that firms at times report KISA
as producing better outcomes than VET.
KISA access becomes an issue when it affects the capacity of low-skilled workers to
move to high-skilled employment. If low-skilled employees are not exposed to the same
range of skill development methods to which high-skilled employees have access, this can
affect labour mobility through skill occupations.
Notes
1. More detailed analysis of the TSME survey is provided in the associated document OECD (2010).
2. For example the Cedefop survey that was the subject of the previous chapter does not include
microfirms within their survey sample.
3. More information on the skills classification is found in OECD (2011).
54
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References
Batinic, B. and M. Bosnjak (1997/2000), “PsychologischeFragebogenuntersuchungenim Internet”, in
B. Batinic (ed.), Internet für Psychologen [Questionnaire studies on the Internet], Göttingen, Hogrefe.
Cedefop (European Centre for the Development of Vocational Training) (2010), Jobs in Europe to become
more knowledge and skills-intensive, European Centre for the Development of Vocational Training
(Cedefop) Briefing Note, February 2010.
Martinez-Fernandez, C. and L. Martinez-Solano (2006), “Knowledge Intensive Service Activities (KISA)
in Software Innovation”, International Journal of Services Technology and Management [Special
Issue], Vol. 7, No. 2, pp. 109-73.
Martinez-Fernandez, C. and T. Potts (2008), “Innovation at the Edges of the Metropolis: An Analysis of
Innovation Drivers in Sydney’s Peripheral Suburbs”, Housing Policy Debate, Vol. 19, No. 3, pp. 553-72.
Martinez-Fernandez, C., I. Miles and T. Weyman (2011) The Knowledge Economy at Work: skills and
innovation in knowledge intensive service activities, Edward Elgar, UK.
OECD (2006), Innovation and Knowledge-Intensive Service Activities, OECD Publishing, Paris, http://
dx.doi.org/10.1787/9789264022744-en.
OECD (2010), Leveraging Training and Skills Development in Small and Medium Sized Enterprises (SMEs):
Preliminary Cross Country Analysis of the TSME survey, OECD, Paris.
OECD (2010b), “Greening Jobs and Skills: The Local Labour Market Implications of Addressing Climate
Change”, C. Martinez-Fernandez, C. Hinojosa and G. Miranda, OECD Local Economic and Employment
Development (LEED) Working Papers, 2010/2, OECD Publishing, Paris, http://dx.doi.org/10.1787/
20794797.
OECD (2010c), SMEs, Entrepreneurship and Innovation, OECD Publishing, Paris, http://dx.doi.org/10.1787/
20780990.
OECD (2011), SMEs, Entrepreneurship and Innovation [Chapter 4 “Skills for Entrepreneurship”, prepared
by Martinez-Fernandez, C. and J. Potter], OECD Publishing, Paris, http://dx.doi.org/10.1787/20780990.
Sharpe, S. (2008), Regional Dimensions of Innovative Activity in Western Sydney, PhD Thesis, University of
Western Sydney, Sydney.
SKILLS DEVELOPMENT AND TRAINING IN SMES © OECD 2013
55
Skills Development and Training in SMEs
© OECD 2013
PART I
Chapter 3
Innovators, exporters
and new skills development
by
Cristina Martinez-Fernandez and Samantha Sharpe
This chapter analyses participation in training and skills development activities on
the basis of other characteristics within the firm such as innovative activity, sector
and export orientation. In this chapter we use these characteristics as a proxy for
“growth potential” firms. There is extensive literature on the relationships between
innovative activity in firms, and revenue and employment growth over the longer
term. Exporting firms are also more likely to develop new markets and therefore
present similar growth prospects. This allows some conclusions about the
association of training activities and the characteristics of these firms to be drawn.
The chapter also examines the performance of organisations in skills development
within emerging skills areas such as entrepreneurship and green skills.
57
I.3.
INNOVATORS, EXPORTERS AND NEW SKILLS DEVELOPMENT
Skills development in innovative firms
Innovation is a key driver of economic activity (OECD, 2010). Organisation level
innovative activities are an essential component when seeking to understand dynamism
and competitiveness. Innovation by its nature is about doing new things, therefore,
innovative activity is a critical contextual element for understanding how firms learn new
things through skills development and training activities.
In the survey, five types of innovative activity were investigated:
●
Product and service innovation – a new or substantially improved product or service.
●
Operational innovation – a new or substantially improved method of production.
●
Organisational innovation – a new or substantially improvement method of organising the
business.
●
Technical innovation – the creation of substantial customisation of new technology or
equipment.
●
Green innovation – a new product, service, or operation that has resulted from climate
change adaptation. A green innovation could also fall into one of the four previous
categories, however, this last category aims to separate it into an additional metric.
Innovation can also have degrees of novelty. Radical innovation is defined as a one time,
big and significant change, whereas incremental innovation occurs over a longer period of
time and is the culmination of a series of gradual or small changes and improvements
(OECD, 2005).
The levels of innovative activity in Belgium, Canada, the United Kingdom and New
Zealand (see Figure 3.1) are consistent with results of business innovative activity in OECD
countries for other small and medium sized enterprises (SMEs) (OECD, 2010c). The Polish
results are surprising (60% of surveyed firms are not innovating) and whilst a lower level of
innovative activity may be expected as Poland continues to become an increasingly
sophisticated economy within Europe, these results may point to specific characteristics in
the sample. Turkish firms showed strong levels of innovative activity (83% of firms
innovating), which could be due to the fact that they are embedded in an industrial district
and therefore receive resulting benefits from customised training and skills development
programmes as well as cluster strategies. However, this result is from a relatively small
number of survey respondents, and must therefore be interpreted with caution.
Both New Zealand and the United Kingdom also display high levels of innovative
activity; New Zealand has the highest levels of innovative activity (85% of surveyed firms)
and the highest proportion of highly innovative firms (68% of the innovative firms were
defined as highly innovative). The United Kingdom has 78% of firms innovating, with 64%
of the innovators defined as highly innovative. The other surprising result is Belgium; only
53% of surveyed firms were innovative, with 47% stating no innovative activities in the past
three years. Over half of the innovative firms were defined as highly innovative. This result
could be a sector-based issue; the Belgian sample had a large proportion of service firms
58
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I.3.
INNOVATORS, EXPORTERS AND NEW SKILLS DEVELOPMENT
Figure 3.1. Innovative activities in TSME survey firms
Innovating
%
100
Not innovating
% of high innovators
90
80
70
60
50
40
30
20
10
0
Belgium
Canada
United Kingdom
New Zealand
Poland
Turkey
Total
Source: Leveraging Training and Skills Development in SMEs Project (TSME) survey, 2011-12.
within the sample (see next section for further detail). It may be that service-based firms
are not actually less innovative, but can identify less with traditional product innovations,
and therefore seem less innovative in such surveys.
Training and skills development characteristics of innovative firms
The training and skills development activities of innovative or highly innovative firms
are not that different from each other or the profile of firms generally. Figure 3.2 shows the
levels of participation of innovative and highly innovative firms in both formal and
knowledge intensive service activities (KISA) skills development activities across different
Figure 3.2. Participation in skills development activities within innovative firms
Highly innovative
Innovative
Country average
% of firms
90
80
70
60
50
40
30
20
10
VET
65 years+
50-64 years
25-49 years
Less than 25
Low skilled
High/med. skilled
Employees
65 years+
50-64 years
25-49 years
Less than 25
Low skilled
High/med. skilled
Employees
0
KISA
Source: TSME survey, 2011-12.
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I.3.
INNOVATORS, EXPORTERS AND NEW SKILLS DEVELOPMENT
employee populations. A country average of all firms is also presented for comparison. The
results are similar to the evidence presented in the previous chapter; in that it is the high/
medium-skilled employees and employees aged 25-49 years that participate in the skills
development activities of firms. This holds true across both formal and KISA skills
development methods.
The point of variance between innovative and non-innovative firms lies in the type of
skills development on which they focus for their employees. Table 3.1 shows the types of
skills that firms are developing across the three organisational categories: non-innovators;
innovators; and high innovators.
Table 3.1. Areas of skills development, by development method
in innovative firms
%
Formal training and skills development
Non-innovators
Innovators
Informal/Alternative training and skills development (KISA)
High innovators
Non-innovators
Innovators
High innovators
High/med.
Low
High/med.
Low
High/med.
Low
High/med.
Low
High/med.
Low
High/med.
Low
Routine
16
8
21
16
18
16
11
7
23
17
21
14
Generic
15
7
17
12
17
11
8
6
20
13
18
11
Technical
21
8
36
16
32
15
16
7
42
13
35
13
Management
14
2
28
3
28
3
11
1
39
2
33
3
Social
14
6
26
8
24
9
12
4
31
12
27
12
Language
Entrepreneurship
Green
5
3
11
10
11
8
13
1
13
4
10
4
11
2
14
7
13
6
8
1
22
1
18
1
3
2
8
9
7
8
1
0
8
5
7
4
Source: TSME survey, 2011-12.
In the areas of “advanced technical” and “management” skills within innovative firms
there is significant variance between innovative and non-innovative firms; innovative
firms have double the levels of participation in these activities. Innovative firms also use
KISA as a means of skills development in this area.
Social skills development is also another area of clear variance between innovating
and non-innovating firms. Green skills development is an emerging area of skill for all
firms; the survey results showed that only a small number of firms are considering or
already developing their skill capacities in this area. Innovative firms are much more likely
to be developing green skills capacity than non-innovative firms. This is probably because
innovative firms are better equipped to absorb new technologies and anticipate ways to
adapt to new challenges.
Understanding how green skills are developing in the economy is also an emerging
issue for policy makers. It is clear that understanding skills development within innovative
firms is going to be the key to understanding how green skills will emerge and develop.
Skills development and the market orientation of firms
For the majority of firms in the survey sample, their markets are at the local and national
scale, with only 14% of the total firms sampled engaging in export activity. Export activity was
highest for firms in Belgium (with 25% of firms exporting), followed by the United Kingdom
(20%) and New Zealand (18%). The Canadian firms were strongly focused on the domestic
market, particularly at the national level. Figure 3.3 shows these results in further detail.
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Figure 3.3. Export orientations of surveyed firms by country
Exporters
%
100
National
Local
90
80
70
60
50
40
30
20
10
0
Belgium
Canada
United Kingdom
New Zealand
Poland
Turkey
Total
Source: TSME survey, 2011-12.
Export activity is often linked with innovative activity in that innovative firms have
products and services that are competitive within global markets. Figure 3.4 shows the
market orientation of firms by their innovative activities. A higher percentage of innovative
(16.5%) and highly innovative firms (16.6%) undertake exportations in comparison to noninnovating firms (11.1%). This provides some confirmation of a relationship between
export orientation and innovative activity.
Figure 3.4. Market orientations of firms by level of innovative activity
%
90
Exporters
National
Local
80
70
60
50
40
30
20
10
0
Non-innovators
Innovative
Highly innovative
Source: TSME survey, 2011-12.
The surprising finding from this research is the focus on the local market in the highly
innovative firms category. 81.9% of highly innovative firms compared to 40.9% of
innovative firms and 50.7% of non-innovative firms were operating in their local market.
The highly innovative firms have almost double the interaction with local markets
compared to the other two categories of firms. This could suggest that cluster dynamics are
at work within these highly innovative firms i.e. they are situated in amongst other firms
within their value chain, which in turn creates the level of intensity in the local market for
these highly innovative firms.
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Skills, sectors and clusters
Industry composition varied from country to country (see Figure 3.5). In some countries,
one industrial sector dominated the sample. In Turkey, the vast majority of firms were
manufacturing firms (95%), whereas in Poland, 79% of firms were in the tertiary services
sector. In Belgium, Canada, New Zealand and the United Kingdom, tertiary services made up
just over or just under two thirds of the sample in these countries, respectively.
Figure 3.5. Industrial compositions of firms by country
%
100
Construction
Manufacturing
Tertiary services
Primary industries
Utilities
90
80
70
60
50
40
30
20
10
0
Belgium
Canada
United Kingdom
New Zealand
Poland
Turkey
Total
Source: TSME survey, 2011-12.
Manufacturing firms have the highest levels of training in each of these two categories
(with 49% engaged in entrepreneurial training and 25% in green skills training), however, in
both cases the majority of the training is one-off. Across all the industries, training in these
two areas is most likely to be a one-off, except in the case of business services and green
training.
Manufacturing firms are using both formal (vocational education and training, or
“VET”) training and informal skills development across all the skills types. Results are
shown in Figure 3.6. For employees with high-skill levels, training activities are focused on
the technical management and social skills sets. There was also little difference in whether
skills development in these areas occurred via formal or informal methods. This could
suggest some partnering of both approaches (either intentional or accidental) in the skills
development of these employees.
For lower skilled employees, skills development activities were focused on technical,
routine and generic skills areas. In all of these skills types, formal training was the most used
method. However, 20% of firms surveyed cited that their lower skilled employees were
engaged in KISA based routine skill development, 15% in technical and 12% in generic skills.
In comparing the skills development activities of manufacturing and service firms
(Figure 3.7), it is immediately clear that less skills development, both formal and informal,
appears to be happening in service firms. The pattern of variance between the higher
skilled employees and lower skilled employees remains, as does the concentration focus of
the skills areas, for example, technical, management and social skills development in
higher skilled employees, and routine and generic skills with lower skilled employees.
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Figure 3.6. Skills outcomes by skills areas in manufacturing firms
(VET versus KISA)
High/med.
Low
% of firms
35
30
25
20
15
10
5
Entrepreneurship
Green
Green
Language
Entrepreneurship
VET
Social
Mgmt
Technical
Generic
Routine
Green
Entrepreneurship
Language
Social
Mgmt
Technical
Generic
Routine
0
KISA
Source: TSME survey, 2011-12.
Figure 3.7. Skills outcomes by skills areas in service firms
(VET and KISA)
High/med.
Low
% of firms
35
30
25
20
15
10
5
VET
Language
Social
Mgmt
Technical
Generic
Routine
Green
Entrepreneurship
Language
Social
Mgmt
Technical
Generic
Routine
0
KISA
Source: TSME survey, 2011-12.
The difference in the levels of skill development activities could be due to the survey
sample and/or the understanding of training (both formal and informal) within the tertiary
sector.
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Development of new skills
Entrepreneurial skills
Entrepreneurial skills are linked to abilities to identify new business opportunities.
Entrepreneurial skills are essential for new business creation and economic dynamism
within the economy. Firms in each country have identified a need for entrepreneurial skills;
with a high need identified in Belgium, New Zealand and Turkey (see Figure 3.8). The low
level of entrepreneurial skills in Canada (only 10% citing a skills need) and Poland (23% citing
skills need) warrant further investigation to understand these comparatively low levels.
Figure 3.8. Entrepreneurial and green skills needs by country
High need
%
60
Some need
50
40
30
20
10
Entrepreneurship
Total
Turkey
Poland
New Zealand
United Kingdom
Canada
Belgium
Total
Turkey
Poland
New Zealand
United Kingdom
Canada
Belgium
0
Green
Source: TSME survey, 2011-12.
Green skills are an emerging area of skills development and in most countries the
demand for these skills is strongly influenced by the national regulatory environment and
environmental policies. Therefore, variance between countries would be expected due to
the variance of environmental regulation, for example, the higher levels of identified green
skills need in the United Kingdom and New Zealand could be attributed to stronger
environmental regulations (energy efficiency and carbon pricing) within these countries.
Green skills
This section specifically examines the demand for green skills within the survey
sample. There is much evidence at a national and international level, and within policy
dialogue, of the importance of skills that can enable business adaptation to climate change.
The decarbonisation of economies will lead to significant shifts in industrial activity and
will create many business opportunities as well as threats. The aim of the green skills
questions within the survey was to investigate the level of awareness and the level of
activity in skilling employees in this area. The questions are also intended to gauge the
level of awareness of the need for these skills within regional business communities, and
to assess the strategies firms are putting in place to gain these skills.
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Transitioning to a greener economy is not a new behaviour for large firms, particularly
for firms operating in the resources industries. Indeed, mining, energy and petrochemical
corporations (among others) have been working on this transition, prompted by the need
for resource efficiency, long before “greening the economy” became a popular catchphrase.
However, there are two associated dynamics of the move to a low carbon economy that
have received little attention within technological and innovation analysis efforts, both
from the private sector and from the public policy arena:
●
Management of the skills and training needs of human capital at the local level. The challenge
of moving towards a cleaner, greener economy requires one to identify policies,
measures, and strategies for the future’s planned low carbon growth, where small and
medium enterprises can be part of strategic implementation plans at the local level. But
the dynamics of green local workforce development are largely unknown. Adapting local
labour markets to achieve more jobs, and better quality jobs, whilst also moving towards
a low-carbon economy will require activities that strengthen education and training
systems, and support skills development at both the industry and public sector levels.
This is especially the case for the SME’s sector, as they lack the internal training strength
of large firms.
●
Skills and employment implications for small and medium enterprises. SMEs are more often
than not relatively unaware of the technological and operational adaptations required by
the low-carbon development. Furthermore, they are usually poorly linked to the often
more savvy larger corporations. SMEs also have the additional challenge of a low
participation rate in training and skills development programmes and the extent of this
participation is usually unknown at the local or regional level. Therefore, reaching and
greening SMEs remains a significant challenge for the transformation ahead.
As SMEs account for approximately 99% of all enterprises and two thirds of
employment across the OECD area (OECD, 2008, 2010), their transition to sustainable
practices – in both manufacturing and services – is key to the large-scale uptake of a green
growth model. The transition towards the green growth economy is highly demanding, in
particular for manufacturing firms, including SMEs, as they account for a large part of the
world’s consumption of resources and generation of waste. Worldwide, the energy
consumption of manufacturing industries grew by 61% from 1971 to 2004 and accounts for
nearly a third of the global energy usage (OECD, 2010d). Likewise, manufacturing industries
are responsible for 36% of global carbon dioxide (CO2) emissions (IEA, 2009).
Greening the economy and seizing opportunities along the path to a low-carbon
system requires transforming jobs, occupational profiles and business operations in ways
that are still quite uncertain. New skills are required not just for innovation and
competitiveness, but also for adjusting to climate change policies and regulations.
Evidence from a number of countries shows that skills shortages have already developed
in certain sectors or occupations, which are not well served by traditional training institutions
(Cedefop and ILO, 2010). SMEs generally rely upon on-the-job forms of training and learningby-doing, which exhibit important limitations at a time of substantial shifts in the skills
required for responding to new competitive and institutional settings. In addition, most SMEs
have little awareness about the future needs for new green skills and their investments in
green training and knowledge-intensive activities are very limited (OECD, 2010b).
The transition towards a low carbon economy demands that workers’ skills be
adapted and that new generations are educated to take up appropriate skills to meet the
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changing demand. Labour markets and training policies can play a key role in facilitating
the structural adjustment required by the transition to green growth, while, at the same
time, minimising the associated social costs. Flexibility in the delivery of training and skills
development programmes remains crucial to ensure it reaches SMEs (OECD, 2010d).
The survey found low levels of awareness and activity in skilling employees within
this area even if the decarbonisation of economies will lead to significant shifts in
industrial activity and will create many business opportunities as well as threats (see
Figure 3.8). Only in New Zealand did more than 50% of the surveyed firms indicate the need
for some green skills.
Outcomes of entrepreneurship and green training
Although entrepreneurial and green skills categories are emerging skills areas and the
data available to understanding their development is minimal, these areas are of major
policy relevance, particularly the green skills area.* Therefore, although this survey only
offers a snapshot of green and entrepreneurial skill developments within the case study
regions, the results have wider research relevance because of the lack of data and analysis
available.
Outcomes from entrepreneurship training are predominantly focused on highly skilled
employees, however, the United Kingdom is a notable exception. In Belgium, the United
Kingdom and New Zealand only high-skilled employee outcomes are recorded. In Poland and
Turkey, 2% and 6% of firms noted outcomes for low-skilled employees in VET, and 0% and 4%
in KISA, respectively. In Poland and Turkey, overall levels of entrepreneurship outcomes are
lower than other countries; higher skilled outcomes for both countries are below 10%,
compared with Belgium (11%) and the United Kingdom (18%).
The differences between outcomes for high- and low-skilled employees from green
KISA activities are narrower than in comparison with the results from formal training
activities. Turkish firms lead the way, while 11% of firms from Belgium report outcomes for
high-skilled employees and 6% for low-skilled in VET and 12% and 6% in KISA. For New
Zealand firms, only 4% of firms reported outcomes for high-skilled employees and 1%
for low-skilled in VET and 4% and 3% respectively for KISA. Potentially, the prominence of
the green economy in these countries has made it easier to access formal skills and
competencies rather than develop them through less formal methods.
The survey has shown that firms obtain different levels of outcomes for the types and
formats of training and skills development they do. The survey also shows that these
outcomes accrue differently depending upon whether or not employees are considered
higher skilled within the firm, or lower skilled. The survey also asks the firm to assess if, on
the whole, they received more positive outcomes from informal or formal training
activities. Figure 3.9 records the percentage of firms that cited that they received better
outcomes from their informal (KISA based) training activities than from their formal
training activities in the two skills areas we are discussing in this section – green skills and
entrepreneurship skills. The figure also shows whether or not the outcomes are different
for low-skilled or high-skilled employees.
* Arguably, entrepreneurship has been of longstanding interest to policy makers because of the link
to business creation and economic and employment development. It is more the sophistication of
analysis of entrepreneurship in recent history that is driving continuing policy interest.
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Table 3.2. Outcomes for entrepreneurship and green skills
by employee skills level and country
%
VET
KISA
High/med.
Low
High/med.
Low
Belgium
11
1
11
1
Canada
4
0
7
0
United Kingdom
0
17
33
2
New Zealand
8
0
11
0
Poland
14
2
12
0
Turkey
16
6
21
4
Total
12
4
13
1
Belgium
6
4
5
3
Canada
5
1
5
3
United Kingdom
4
18
8
6
New Zealand
5
1
4
3
Poland
4
1
2
1
Turkey
11
6
12
6
5
5
4
2
Entrepreneurship
Green skills
Total
Source: TSME survey, 2011-12.
Figure 3.9. Firms with better outcomes from KISA in green
and entrepreneurial skills
High/med.
%
50
Low
45
40
35
30
25
20
15
10
5
Entrepreneurship
Total
Turkey
Poland
New Zealand
United Kingdom
Canada
Belgium
Total
Turkey
Poland
New Zealand
United Kingdom
Canada
Belgium
0
Green
Source: TSME survey, 2011-12.
As was to be expected, there is a large degree of country variance; in the United
Kingdom, New Zealand and Turkey, 20% or more of firms listed informal training activities
as delivering better entrepreneurship outcomes than formal activities. In the United
Kingdom, there was little difference in whether these outcomes were for higher or lower
skilled employees.
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For green skills, over one third of the United Kingdom surveyed firms and half of New
Zealand firms thought they got better skills outcomes from informal activities. These results
were concentrated in higher skilled employees, but from earlier results we have established
that green skills development in total is also focused on higher skilled employees.
The reasons behind these results could possibly be found in the lack of training
products in the market or the difficulties for VET firms and trainers to design curricula that
are relevant for the firms. Due to the important obstacles faced by SMEs in accessing
training, green KISA could offer a more flexible way to access the knowledge required, even
if little planning might be involved as per the “one-off” trend for green KISA.
In both cases, very few Canadian firms reported receiving better outcomes from
informal skills development activities. This could be because of a lack of skills need on the
part of the firms, lack of availability of informal channels of skills development in these
areas, or that Canadian firms had stronger connections with formal training for skills
development, through their legislative regulations for training within small firms.
Policy implications from these results include reference to how training programmes
and strategies are designed. Programmes targeted at SMEs need a different focus and
customisation to those targeted at large firms. As these results show, KISA can provide a
conductive learning method for SME firms to acquire emerging knowledge and skills that
they otherwise may not be able to access from formal sources. Increasing SMEs’ access to
KISA can enable these firms to participate more fully in the new opportunities of a low
carbon economy.
Conclusions and policy implications
This chapter presents analyses of both highly innovative and exporting firms – proxies
that have been used for “growth potential” firms. In “growth potential” firms, although the
overall rate of participation in training activities was not vastly different to the rest of the
survey population, the skill areas on which these activities were focused was very different.
For innovative firms, training in productivity enhancing skills sets, including business planning,
management and technical skills, was much higher – in some cases, twice the levels seen in the
rest of the organisational population surveyed. In KISA training, they were the highest.
This did have a negative connotation, however, with the higher usage exacerbating the
differential between higher skilled and lower skilled workers over training participation.
The analysis of exporting firms also highlights policy implications. The assumption
that export orientated firms would lose focus on the local area is not supported by survey
evidence – in fact the opposite is true, with export orientated firms also appearing to be the most
embedded in local markets.
Outcomes from new skill areas of entrepreneurship and green skills also have
implications; there is great variation in the awareness of skills needs in these areas across
countries, and where training in these areas is taking place, it is higher skilled workers who
are participating. Both these results point to the need for systematic methods for skills
assessment of firms in emerging areas, and an overall focus on increasing participation
levels of lower skilled employees in these key “future fundamental” skills sets.
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References
Cedefop (European Centre for the Development of Vocational Training) and International Labour
Organization (ILO) (2010), Skills for Green Jobs: European Synthesis Report, European Union,
Luxembourg.
International Energy Agency (IEA) (2009), World Energy Outlook, IEA, Paris.
OECD/Statistical Office of the European Communities, Luxembourg (2005), Oslo Manual: Guidelines for
Collecting and Interpreting Innovation Data, 3rd Edition, The Measurement of Scientific and
Technological Activities, OECD Publishing, Paris, http://dx.doi.org/10.1787/19900414.
OECD (2008), Leveraging Skills and Training in SMEs, CFE/LEED (2008)6, OECD, Paris.
OECD (2010), SME Participation in Formal Vocational Education and Training (VET) in Selected OECD Countries
(TSME Background Report), OECD, Paris.
OECD (2010b), “Greening Jobs and Skills: The Local Labour Market Implications of Addressing Climate
Change”, C. Martinez-Fernandez, C. Hinojosa and G. Miranda, OECD Local Economic and Employment
Development (LEED) Working Papers, 2010/2, OECD Publishing, Paris, http://dx.doi.org/10.1787/
20794797.
OECD (2010c), SMEs, Entrepreneurship and Innovation, OECD Publishing, Paris, http://dx.doi.org/10.1787/
20780990.
OECD (2010d), “SMEs and Green Growth”, Issues Paper for the “BOLOGNA +10” High-level meeting
on SMEs and Entrepreneurship: Lessons from the Global Crisis and the Way Forward to Job Creation
and Growth.
SKILLS DEVELOPMENT AND TRAINING IN SMES © OECD 2013
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Skills Development and Training in SMEs
© OECD 2013
PART I
Chapter 4
Learning by doing – best practices
in training and skills development
by
Cristina Martinez-Fernandez and Tamara Weyman
This chapter examines the results of case study interviews conducted with sample
small and medium sized enterprises (SMEs) within each country, to better
understand what training and skill development activities are undertaken by SMEs,
and the impacts of these on the business. The global financial crisis, and climate
change, are investigated in terms of their impact upon SMEs’ training arenas,
particularly marketing, recruitment and job design. Motivators and challenges to
training provision and skill development are investigated in depth, including the
benefits of having training plans, or the expenses associated with training, not only
in paying tuition fees or hiring external trainers, but in lost employee work time.
Formal versus informal education and training are investigated, with the
importance of in-house training as well as cross-organisational collaborations and
exchanges being emphasised. Policy implications resulting from this analysis are
explored in detail, including: impacts of the global financial crisis on SMEs in terms
of training; the importance of structured training systems and formal training
programmes; use of alternative training methods by SMEs; climate change impacts
on SMEs, including the dichotomy of benefits accruing to some companies but
financial burdens being suffered by others; and informal training systems and the
need to involve SMEs in policy development.
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Case study interviews
Case studies of firms were the third step in the Leveraging Training and Skills
Development in SMEs (TSME) project. Each country conducted interviews with sample SMEs
within their respective regions in order to gain further insights into the levels of training
and skills development in SMEs and a better understanding of regional skill ecosystems.
The interviews were conducted with the manager/owner/head of human resources (HR) of
each firm, focusing on the following categories:
●
Impact of the financial crisis, especially on training and skills development.
●
Companies’ training and skills development plan/structure.
●
Formal industry training/vocational education and training activities – focusing on skills
impacts on the firm, employee and the local area.
●
Informal knowledge intensive service activities (KISA) skills development activities –
focusing on skills impacts on the firm, employee and the local area.
●
Motivation and collaboration with other institutions.
●
New job profiles and training for climate change and climate change regulations.
●
Canadian company case studies in Manitoba and Quebec were conducted in a different
format, examining three initiatives: called Consortia and Workplace Education Manitoba
and in Montréal, “les mutuelles de formation”. Therefore, these regions were not included
in the country-region comparative analysis, but are highlighted throughout as examples of
good practice.
Thirty-three firms (SMEs) were interviewed from six countries in various regions
(Table 4.1) and representing various economic sectors, mainly within manufacturing and
real estate, renting and business activities. It should be noted that 11 firms could be classed
as green industry enterprises, that is, involved with renewable and low carbon energy,
ecological appliance engineering, waste management, nurseries and landscaping.
Table 4.1. Number of case studies per participating country
Region (country)
East Flanders (Belgium)
Number of case studies
11
Canterbury (New Zealand)
5
Zaglebie (Poland)
4
West Midlands (United Kingdom)
5
Middle East Industry and Trade Centre (OSTIM) , Ankara (Turkey)
5
Manitoba and Quebec (Canada)
3
The majority of the firms interviewed were small enterprises (10-49 employees)
followed by medium enterprises (50-250 employees) and microenterprises (0-9 employees).
Mature enterprises (in operation for 10 years or more) made up 70% of the sample firms
interviewed. The firms’ markets varied between very tight niche markets to regional,
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national and international regions. The skills requirements of these sample firms mostly
referred to technical/advanced skills followed by management, generic, routine and social
skills (Figure 4.1).
Figure 4.1. Skills required by firms
30
25
20
15
10
5
0
Generic
Routine
Technical/
advanced
Management
Social
Language
and cultural
Green
All charts in this chapter refer to counts of case study firms across key variables.
The impacts of the financial crisis
Just over half the firms interviewed mentioned the effects of the financial crisis either
on their sales or on their training and skills development (16 out 30). These included SMEs
from the West Midlands, East Flanders, the industrial zone OSTIM (5) and one Zaglebie
SME. The majority of these SMEs were small, mature enterprises within the manufacturing
economic sector. Eight firms noted that they were not affected by the crisis. This was due
to a number of factors, including:
●
Increase in demand, services and sales.
●
Being a small company and therefore not so many employees to train.
●
No training budget.
●
Training is conducted on-the-job.
Two of these companies noted that they had struggled during 2009-10, but this was not
because of the financial crisis, but rather as a result of government manipulation, negative
media cover, the market becoming saturated, and one firm noted that they had too many
employees and this was creating a bottleneck within the firm.
EcoPuur has perceived a fallback at the beginning of 2010, compared to the previous
year. However, this was caused by other factors than the economic crisis, because the
government and the media artificially manipulated demand in ecological appliances.
Policy changes in subsidy schemes and negative media coverage had a far more
negative effect than the economic recession. It is nevertheless true that the market for
solar panels is slowly becoming saturated.
EcoPuur (Ecological appliance engineering and installation within Flanders, Belgium)
Eight firms stated that the economic crisis had a negative effect on their enterprise in
various ways, such as:
●
Decline in sales and investment.
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●
Reduced training budgets and as a result stopped sending staff to training activities.
●
Employee redundancies.
●
Less money to develop services.
●
Reluctant to recruit people without experience.
●
Reduced government budgets.
Four firms identified that due to the financial crisis they had to reduce training
budgets, thereby reducing training activities for employees. Consequently, they reported
that there had been a decline in employee motivation and work quality, especially within
the areas of customer relations and social skills; one firm highlighted a decline in
qualifications of skilled employees.
Some firms reacted to the financial crisis by restructuring their company focus, either
by diversifying its market, or altering the company structure by introducing a sales
department in an effort to increase their client base. One company restructured their
training approach by incorporating Lean manufacturing,1 cost management and Kaisen
methodology.2
Only after the new internal sales department was set up the co-operation with new
clients was launched. The company does not exclusively depend on its old clients
anymore. It can be said that the establishment of the KISA department (Sales
Department in this case) helped to mitigate the challenges of the crisis in the
automotive industry and helped SEGU to survive and to develop despite the crisis by
broadening its client base and diversification of production.
SEGU (manufactures electronic devices – Zaglebie sub-region Poland)
The SMEs that were negatively affected had a decline in sales/investment thereby
impacting on the firms’ operation, including employee redundancies, a decline in
recruitment and reduced training. The reduced training also impacted on employee
motivation and work quality, consequently lessening the firms’ innovation potential.
Training and skills development plans/structures of firms
Training and skills development plans/structures were identified by over half (60% or
18 case studies) of the interviewed SMEs, with representation from each participating
country. Mostly mature small to medium sized firms had implemented plans and
structures for their training and skills development. There were four approaches discussed
(illustrated further in Figure 4.3 later in the chapter), incorporating one or a combination of:
●
a relevant department/section within the organisation
●
performance appraisals/assessments
●
a training plan and/or programme
●
training budget.
Relevant department/section – in total, six new and mature firms of various sizes from
East Flanders and Zaglebie regions discussed their department/section as having an
important role in their training and skills development. There were four different
departments/sections identified, including:
●
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HR personnel/section – six firms discussed aspects of their HR section, which was
responsible for development and implementation of policy, assessments and plans.
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Figure 4.2. Training and skills development plans/structures/approaches
9
8
7
6
5
4
3
2
1
0
Department/section
Performance
appraisals/assessments
Plans/programmes
Training budget
Source: TSME survey, 2011-12.
●
Quality department – one firm that manufactures rubber and plastics for the automotive
industry in East Flanders has a “quality department” due to the changing production/
technology requirements of the company. An important responsibility of the department is
to train the production managers and workers on ways to implement the new technology.
●
Sales department – an important part of the firm, responsible for attracting new clients,
this requires innovation in new products and services.
●
Research and development department – responsible for the further development of
products and processes of production – an essential part of the innovation process.
Performance appraisals/assessments – Seven established and mature enterprises within
small and medium sized firms from the Canterbury, West Midlands, and the industrial
zone OSTIM noted that they have implemented performance appraisals and/or
assessments as part of their training and skills development structure. Generally, the
process includes:
●
Employee input – concerning specific training needs and giving the employee more
responsibility.
●
An assessment of competence/skills needed for the company’s positions.
●
Training recommendations.
●
Training plan.
This process is illustrated further through the following quote:
With the introduction of a formal HR manager, a detailed HR policy was put in place.
This includes performance assessments and yearly training development plans for all
employees. For every function, a set of skills have been drawn up by the HR manager
and the line managers. This leads to a skills matrix that maps all employees versus the
required skills for their department. … The individual skills assessments are the basis
for training recommendations. Every year during the performance evaluations, a
training plan is designed together with the employee. Combell Group counts on the
input of the employee to formulate perceived skills needs as well.
Combell Group (offers IT infrastructure and hosting solutions, East Flanders, Belgium)
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Training plan and/or programme – A total of seven firms from Canterbury, East Flanders
and Zaglebie had a training plan, programme and/or procedures for their skills and training
development, the majority were mature businesses, however, within various size
categories. Three aspects of the training plan/programme/procedures were identified:
●
A training plan/programme – in some cases, as a firm grew, it was necessary to develop
a training programme or development plan for their new employees. Another reason
discussed was the need to meet specific skills standards that were agreed upon in
contracts by clients.
●
Diversity Action Plan – a nursery in East Flanders, Belgium had difficulties attracting
local employees, however, it was easy to attract motivated and skilled East European
employees. The language barrier of the foreign staff members made it difficult to explain
all the tasks, as a result, and with financial aid from the government, a diversity action
plan was designed. The plan consists of 12 points, one of these is a DVD, which shows all
the different activities at the nursery throughout the entire year and which served as an
instruction tool.
●
Part of the company’s business plan – a Canterbury (New Zealand) electricity networking
company noted that their “… training is an essential part of the firm’s business plan, and
is considered by its managing director,… as an investment in the firm’s future…”.
Training budget – A total of eight small and medium sized firms, the majority being
mature enterprises, from Canterbury, East Flanders, the industrial zone OSTIM and
Zaglebie discussed some sort of training budget allocations. The training budget is usually
a result of the training assessment and plan development, training projects, competency
standards such as working safely at heights, and skills upgrading. As discussed earlier,
training budgets of some firms were reduced as a consequence of the financial crisis.
In summary, mainly mature, small to medium, SMEs had developed training and skills
plans and/or structures. As illustrated in Figure 4.3, training and skills development plans
usually have a number of definite components, each with different inputs required from
people throughout the firm. The structures typically consist of a department or section
Training and skills development plans/structure
Figure 4.3. SMEs’ training and skills development plans/structures
Department/
section
Performance
appraisals/
assessments
Training plan/
programme
• Either one or combination of:
❖ Human resources
❖ Quality
❖ Sales
❖ R&D
• Employee input
• Position assessment/skill needs
• Training recommendations
• Either one or combination of:
❖ Training plan
❖ Diversity plan
❖ Business plan
Training budget
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responsible for the firm’s skills development and training; performance appraisals and/or
assessments are typically conducted with employee input, the identification of skills needs
and then training recommendations. This is generally followed by the development and
implementation of the training plan either individually for the employee or for the firm. A
training budget can then be finalised.
Formal industry training/vocational education and training activities in firms
Just over half of the SMEs interviewed discussed formal training approaches such as
courses, with the majority of these SMEs being mature, small to medium enterprises,
requiring technical and management skills. Courses are usually available through:
●
Universities/colleges (some SMEs encourage their staff to undertake a Masters Degree).
●
Private training firms.
●
Industry organisations/institutes.
●
Public bodies.
●
Chambers of Commerce.
●
Regional organisations.
The benefits to the firm for staff undertaking formal training are:
●
covers skills needs and gaps within the firm;
●
accreditation, meeting standards and updates in regulation;
●
provides effective and productive working environment – including organisational
growth, improvements in labour productivity, higher turnover and profits;
●
develops a common understanding and culture among staff;
●
investment in the future, increases quality/quantity of research and development and
innovation.
Formal training benefits to the employee include:
●
Increased knowledge and skills – technical, managerial, social, communication and
teamwork.
●
Higher motivation and self-confidence and increased productivity.
●
Qualifications and worker advancement.
●
Increase in entrepreneurial behaviour.
Only one firm, a medical company from Ankara region, Turkey, noted that formal
training benefits the local area through strengthening the image of the industrial zone
OSTIM as a region hosting successful businesses.
Eighty per cent of the SMEs interviewed identified a number of formal training issues
and/or concerns. These include micro, small, and medium SMEs; the majority were mature
businesses, from all participating countries. This suggests that the mature firms, no matter
what size, have developed the experience and knowledge over the years to assess the
quality and value of formal training approaches that are available to SMEs. These issues
and concerns could explain why only half of the SMEs interviewed utilised formal training
approaches. The areas of concern are categorised into the following:
●
Enterprise/company.
●
Public bodies.
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●
Training providers/programmes.
●
Universities/colleges.
Enterprise/company issues and concerns – 87.5% of those SMEs who identified issues and
concerns recognised that these relate to their firm in three ways, which were:
●
High cost/too expensive to provide training – associated with the costs of hiring external
training providers and resources as a result of: universities that do not offer short
courses and are more suited to larger companies; courses offered by public institutions
are often too broad/basic, teachers lack the industrial experience, and colleges no longer
conduct industrial workshops; and production loss due to the financial crisis.
●
Impossible to interrupt production time/lack of time – due to company size, employees
are constantly needed to maintain production and service, in order to allow an employee
time off work to carry out training there is an increase in the pressure and workload of
other employees or there is a reduction in product output.
●
Too difficult to identify suitable training providers or lack of training providers/
programmes – although skills development activities are on offer, it is often difficult for
SMEs to assess the quality of the available training programmes or, in some cases, there
is a lack of awareness that training opportunities exist. On the other hand, some SMEs
are highly specialised and in their cases there are a lack of training programmes
available.
Other company issues/concerns identified:
●
Staff are recruited with the skills needed.
●
Staff not willing to participate in training.
●
Fear of company espionage.
●
Lack of public funding.
●
Risk of poaching after training.
Specific circumstances illustrating these difficulties are provided through the
following quotes from firms:
The firm then looks at courses offered by private trainers such as Software Education,
an Australasian firm with offices in Brisbane, Sydney and Wellington. Staff have
participated in these courses, which has provided new skills, but the firms finds it an
expensive option, especially if it is wanting a team of staff members to develop the
skills or if the course involves travel to Wellington or Sydney. A three-day course would
cost about NZD 2 500 (including travel) plus the opportunity cost of releasing the staff
members from work when the business has lots of work to do and deadlines to meet.
It is harder for a smaller enterprise to take “time out” even if it would be worth it in the
long-run.
Alchemy Group Ltd (Purpose built software systems, Canterbury region, NZ)
The company has not found any highly specialised managerial training that could
benefit them at a reasonable price. They believe that training and skills development
programmes that they have obtained from public institutions have been too broad and
basic for them. For instance, they have received advice on business management from
Business Link. However, this advice was quite general without presenting any
substantial benefit for the company. Another example is that some employees have
decided to stop attending college, because their teachers did not have the expected
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industrial experience. Their employees have reported that they learn more in the
workplace than they do at the college.
West Midlands, the United Kingdom Company (Fixturing and gauging for the
automotive sector, West Midlands, United Kingdom.)
Public bodies – Half of the concerns expressed by SMEs regarding formal training and
skills development involve public bodies, institutions, agencies and/or departments. Often
these concerns relate to issues with subsidies/funding programmes available, either the
support measures are too complicated and fragmented or there is a lack of information
available about co-financing schemes. One training SME noted that the support mechanism,
such as the SME Portefeuille in East Flanders, requires training firms to be accredited as a
recognised training establishment, however, the investment needed to comply is very
demanding for a small private training organisation. Another issue raised was that “Public
programmes seem to be policy driven” and according to a West Midlands company “do not
necessarily add value to SMEs, they appear to be designed for quite low-skilled people who
need to get back in to jobs”.
Training providers/programmes – The main issue relating to training providers/
programmes discussed by the SMEs is that often the training provided is too broad and
generic for their firm’s needs. A nursery company in East Flanders noted that there is “… one
critical consideration about the use of training. He is a strong believer in the added value of
education, if – and only if – the training is not too general. It should be adapted to every
function and to actual needs”. A West Midland’s company also stated that business
management support was too general and basic for the company. A training and consultancy
firm in East Flanders noted “training is not applicable on the job, too theoretical and not
sufficiently adapted to the client. This causes trainees to wonder whether the training had
any effect at all”. This training and consultancy company (T and C Services) states that they
“… aim to tackle this problem. All training is provided on individual demand, adapted to the
objectives and desires of the company”.
Universities/colleges – There were a number of different issues relating to universities/
colleges discussed by SMEs during their interviews. Two Canterbury firms noted that the
curriculum is designed for the needs of large firms and “covers too much too quickly”. A
custom engineering company in Canterbury noted that “… he no longer finds value in formal
apprenticeships” due to the need to release staff for a six week block course; staff members
after achieving their qualification could resign and go to another firm; staff do not require
the whole programme; the curriculum is designed for large firms; and read-write learning at
a fast pace is not useful for staff who are more practical. Other concerns include: lack of short
courses offered; lack of industry experience; and a lack of practical workshops offered.
These training and skills development issues and concerns, identified through the
SME interviews, contribute to the necessity for SMEs to carry out informal company-based
(KISA) approaches to skills development, which are discussed in the following section.
SMEs’ formal training and skills development is a complicated and interrelated set of
interactions, with external organisations, employees and the firm. Figure 4.4 tries to
illustrate some of the systematic elements of SMEs’ training processes.
External organisations such as universities and private training organisations mainly
utilise courses to provide training, and occasionally public organisations provide the
subsidies/funding to support SMEs. The benefits (shown in the overlapping circles in
Figure 4.4) to the firm include covering skills needs and gaps, accreditation/standards, and
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improving a productive work environment leading to company growth and investment for
the future. Employee benefits (also shown in the overlapping circles) include an increase in
knowledge and skills, motivation and self-confidence, a qualification and, in some cases, an
increase in entrepreneurial behaviour, creating a productive work environment. However,
the formal training approach is rife with issues and SME concerns (italicised text in
Figure 4.4), which relate to the firm, employee, education institutions and public funding
bodies.
Figure 4.4. SMEs’ formal training and skills development model
Lack
of industry
experience
External
organisations
• Courses
• Subsidies/funding
Lack
of short
courses
Accreditations
and standards
Lack
of public
funding
Firm
• Benefits
Qualifications
Too broad/generic
Designed
training
Cover skills
needs
and gaps
Production
time and cost
Designed
for large firms
Motivation
Formal training
and skills
development
Knowledge
and skills
Productive work
environment
Not practical
for staff
Employee
Entrepreneurial
behaviour
• Benefits
Investment
for the
future
Lack
of information
Complicated/
fragmented
Recruited
with skills
needed
Lack
of willingness
to participate
Italics = challenges.
Informal (KISA) skilled development activities
The majority (90%) of SMEs interviewed for the project were undertaking skills
development via informal, or KISA processes. These firms were of various sizes, but tended
to be the more mature firms (in existence for nine years or longer). There is a variety of
informal methods utilised by SMEs, these include.
On-the-job training – Eleven, mostly mature, small and medium SMEs provide on-thejob training to their employees. All of these SMEs require technical skills entailing handson, staff interaction and the building of experience for new and established staff. Due to
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the niche market of most SMEs and thus the unique skills needed, on-the-job training
becomes an essential training approach, for example:
●
Nijis – a restoration company notes that: “Technical skills are taught one-on-one and
this is possible thanks to the small team structure. Nearly everything happens on-thejob. This is considered as an example of knowledge intensive service activities (KISA).
Most learning experiences occur informally.”
●
Lakewood Court Rest Home and Straven House – accommodation and care facility for
elderly patients, the interviewee stated: “Managers and senior staff in both institutions
are expected to provide on-the-job training to their colleagues. This is provided in work
situations to ensure that policies and procedures are being properly carried out, with
particular attention to resident safety and well-being.”
●
West Midland’s Company A – fixtures and gauging for automotive, mentioned:
“… employees have reported that they learn more in the workplace than they do at the
college.”
Mentoring – in nine, mostly mature and small SMEs, senior staff mentor new
employees as an informal approach to training and skills development within their firm.
Mentoring includes a “godfather approach” as described by Burrick, a metal construction
company in East Flanders, Belgium; one-on-one teaching, coaching, guidance, advice, and
feedback. EcoPuur describes their mentoring programme: “… attention is also paid to
informal skills development. Newly hired employees are assigned to a mentor. For any
question about the job content or the company, the new employee can call on his mentor.
This project turned out to be a great success.”
Team/Staff meetings – seven, mostly small, mature SMEs use team/staff meetings as a
form of KISA training and skills development. The purpose for these meetings includes:
share practical work-specific knowledge; exchange ideas and experiences; discuss new
techniques; and weekly reviews. As a result, co-operation and collaboration between the
staff and executive is strengthened and provides an innovative environment to improve
processes and performance.
Groenidee, a landscaping company in East Flanders, Belgium explains their approach:
“… on the informal level, monthly team meetings are held. During that meeting, they
exchange experiences, discuss new techniques and think about past incidents. Hassens
really emphasises this as a learning moment.”
Nijs, a restoration company in East Flanders, Belgium, whose approach includes: “The
team meets for half a day to discuss the plans and execution. Together, they look for
similarities with former projects and get a complete view of the project, rather than only orders
about individual tasks. This meeting can be at offices or on the construction site itself.”
Interpromex, a waste management company in Zaglebie, Poland, uses “… a system of
internal informal training co-ordinated by department managers. Regular briefings are
organised between managers and workers of each department. According to [the] HR
Director, these briefings are devoted to ‘sharing practical work-specific knowledge as well
as to work planning’.”
Other informal approaches include:
●
Company training sessions (five SMEs) – usually undertaken by an internal expert in an
effort to share information, experiences, and updates. The Work Metals firm within
Manitoba, Canada, provides an innovative example of the benefits of company training
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sessions stimulated by inter-firm exchanges on common issues – usually animated by
an external resource person – in an effort to share information and experiences, as well
as monitor the pursued innovation in the participating organisations.
●
Research and development projects (four SMEs) – these are usually supported/financed
by government programmes, however, they have had an important impact on the
training and skills development of firms. For example, three Turkish SMEs interviewed
identified the benefits and impacts of research and development projects. Hydrogen
power company, OSTIM from Ankara in Turkey noted: “… the abilities they developed
through their research and development projects supported by government programmes
had a positive impact on the productivity and product/production quality of the
company. They also think that interactions with suppliers have valuable impacts on
increased knowledge and expertise. The management of the company is of the opinion
that KISA are important for the skills development of staff as they learn through
interaction and experiencing.”
●
Team work (four SMEs) – for the purposes of problem solving and building skills by
internally shifting workers to different team units.
●
Other (two SMEs) – information sharing via newsletters, DVDs, intranet Wiki pages, and
off-the-job practices such as networking, and keeping up-to-date with reading and home
studies.
A company benefits from internal (KISA) training and skills development because it is
more cost effective; SMEs do not have to pay for private trainers and institutions, and inhouse training has less impact on production/service time. Employee benefits, especially
from involvement in research and development projects, include an increase in knowledge
about the firm and general experience, more motivation and self-confidence, and
employee work quality increases. SMEs did not elaborate on any benefits to the local
region, presumably due to the lack of collaboration between companies.
Informal (KISA) skills development provides the most cost/time effective training
approach for SMEs. This is because of the in-house company initiatives undertaken, which
include: on-the-job training; mentoring; team/staff meetings; research and development
projects; company training sessions; and team work. Figure 4.5 illustrates these
relationships. KISA build experience, interaction and knowledge for new and already
employed staff, increasing their motivation and self-confidence.
The activities also help strengthen collaboration between staff and the company
executive, as well as improving processes and performance, and providing an innovative
work environment. A more formal acknowledgement of these KISA skills development
actions should be fostered and nurtured as an integral ingredient to leveraging training and
skills development in SMEs.
Motivation and collaboration with other institutions
Seventy-six per cent of the SMEs interviewed, which were mostly mature, small/
medium sized companies, had some sort of interaction with suppliers and customers,
other organisations/associations, between companies/firms, and tertiary institutions for
the purposes of:
82
●
Collaboration/co-operation.
●
Training purposes.
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Figure 4.5. Informal (KISA) training and skills development model
Cost and time
effective
Work reviews
and updates
Improved work quality
and product/service
output
Building hands-on
experience
Strengthen staff
collaboration
On-the job
Discussing
new
techniques
Team
meetings
Mentoring
Informal (KISA)
skills and development
activities
Firm
training
sessions
Provide an innovative
work environment
Sharing
experiences,
information
and knowledge
Interacting
with staff
Team work
R&D projects
Knowledge
building
Increased motivation
and self confidence
Skills
development
– problem solving
Improved processes
and performance
●
Networking.
●
Clustering.
●
Committee/associations.
These results are shown in Figure 4.6.
Collaboration/co-operation – of those identified as interacting with other organisations,
70% approach this interaction through collaboration and co-operation, mostly with:
●
Customers – before and during production and service delivery, developing ideas, and
exchanging specific knowledge in order fulfil their clients’ needs. Interaction with the
customers also occurs to develop a client base and market supplies.
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Figure 4.6. Other interactions with stakeholders
Other
Committee/associations
Clustering
Networking
Training purposes
Collaboration
14
12
10
8
6
4
2
0
Customers
Suppliers
Tertiary institutions
Other companies
Organisations
Source: TSME survey, 2011-12.
●
Tertiary institutions – to conduct research and development or exchange highly
specialised research and development skills; to foster a strong partnership designed to
inform practical training for the industry; and to share information and learn from their
expertise.
●
Other companies – to disseminate knowledge in the region. It was noted that when
interaction between firms is high, the impact on the local area is positive.
●
Organisations – In the past EcoPuur (Belgium) co-operated with:
❖ UNIZO – who informs, advises and represents their interests.
❖ Syntra, which is a network responsible for employment related competencies of
entrepreneurs and employees.
❖ CEVORA, which is a sector-training centre.
Three of the SMEs in the industrial zone OSTIM in Turkey, noted that there was a lack
of collaboration with local businesses in their area, and that while the “renewable energy
company” had tried to interact and collaborate with other businesses, they were not willing
to do so.
Training purposes – only 34% of SMEs identified as interacting with other organisations
for training purposes. The majority of this interaction occurred within the firm’s value
chain, such as their suppliers (e.g. providing training in the use of new machinery,
maintenance and new recruits); and with their customers, to acquire specific skills in how
to use their customers’ web-based systems. EcoPuur in East Flanders in Belgium, noted
that the benefit of supplier training is that it is adapted to the business cycle; and SEGU,
Zaglebie, stated that supplier training had a profound impact on the way their production
is organised. An innovative example of formal intervention for the firm and the employee
is that of Workplace Education Manitoba (WEM), which is focused around the nine
essential workplace skills identified by the Canadian federal government’s Human
Resources and Social Development Canada (HRDC). Further detail on WEM is presented in
the box below.
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Box 4.1. Workplace Education Manitoba (WEM)
WEM intervention within a company begins with a needs analysis involving both
employer and employees, followed by a flexible assessment scenario that is linked to an
available learning response. The training is customised to meet each firm’s problem and,
in a systemic approach, also involves the immediate supervisors of trainees. The
intervention is a short, functional process designed to create a new perspective within the
organisation, giving people inside the firm the language and framework to enable them to
talk practically about skill development and to assess its feasibility as well as its relevance.
The motivations for firms to become involved are the long-term outcomes, such as:
decreasing absenteeism; improving health and safety figures; increasing productivity and
decreasing error rates, etc. For workers, such an immediate skill improvement creates
better integration into their work environment, and strengthens their job security but,
above all, increases their capacity for developing initiative in the new technologically
intensive context of their work. Paradoxically, such short-term and customised learning
events, because of their immediate impact on the production process and the concrete
relevance for people in their daily work, often initiates or leads to a continuing process of
skill development both within the firm, instigating a new culture attuned to a “learning
organisation”, and for individuals, where it tends to reinforce their sense of personal
efficacy and creates a demand for continuing professional development.
WEM identified how workers, overwhelmed by the essential skills they require, will not
seek out training/education or will refuse such offers, thereby hampering their mobility
within or outside the company. Beyond their company based interventions, Workplace
Education Manitoba also provides individuals with counselling and training opportunities
that they can afford and organise themselves. In all WEM local training centres, drop-in
opportunities exist from 4 to 8 pm, whereby individuals can walk in and seek assistance.
Some SMEs maximise utilisation of this service by releasing their employees one hour
earlier in order for them to benefit from such services. These centres reach then more than
7 000 people every year.
Networking – only 24% of those SMEs that identified interacting with other
organisations use networking for these interactions, and then it is mostly with
associations and chambers of commerce. SMEs noted that networking provides a forum
within which to exchange ideas and experiences, and to learn from other enterprises and
industry peers regarding employee skills development (e.g. the Combell Group, which
offers information technology infrastructure and hosting solutions in East Flanders,
Belgium). EcoPuur, based in East Flanders, Belgium, was the only company to network with
other companies, as they considered it important to meet with other companies under a
co-operative statute, because they have the same considerations and approaches.
One of the most remarkable features of EcoPuur is its practice of clustering. Wannes
Wylin is a radical proponent of collaboration and knowledge-sharing. The company
wants to be a strong regional player, but for projects that reach beyond its frontiers,
EcoPuur refers without hesitation to colleagues in that region. Also for large or very
specific projects, EcoPuur teams up with other companies. In doing so, the firm has
gathered an extensive network of like-minded corporations. For example, he has
made arrangements for joint purchasing of solar panels with his direct competitors or
rather, colleagues. By joining forces, the small firms obtain some bargaining power. In
the future, Wylin would like to formalise these partnerships in a joint organisation.
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EcoPuur, Ecological (Appliance engineering and installation, East Flanders, Belgium)
Clustering – only four SMEs mentioned clustering as a form of collaboration with other
companies. The purpose of clustering is to share knowledge and advise each other and
defend common interests. Examples of clustering include:
●
Opel Willy, East Flanders, Belgium: identified that they grouped a large number of SMEs
within the industrial zone around the topic of waste recycling, to raise awareness of the
environmental cause. The interviewee stated “… together you can achieve things that
are not possible by yourself”.
●
Groenidee, a landscaping company in East Flanders, Belgium noted that there is an
industry cluster through the BFG (an industry employer association) where, according to
the BFG website, members consider each other as colleagues, instead of competition.
The Groenidee interviewee stated that there were structural issues within the industry
that needed to be resolved through a collective organisation. Profit margins in the
industry are too low to enable them to compete; landscaping companies are obliged to
specialise and thus join forces.
Nijis, also based in East Flanders, Belgium, raised an issue regarding clustering, where
they noted that “… co-operative networks are difficult to obtain due to an increasingly
competitive atmosphere in the restoration market”.
Associations – only four SMEs stated that they associate with committees, working
groups or trade associations. The Alchemy Group, Canterbury, New Zealand, stated that
they were on a committee at the Lincoln University to design its computer science
curriculum and were members of a major review of its computing programme that led to a
new degree. The same company also associates with Canterbury Software Incorporated,
which, according to their website, is a voluntary association of software producers and
support agencies working together to help innovative software companies in Canterbury to
commercialise their products and improve service relationships. The Alchemy Group
stated that this association has a strong ethos of supporting the software industry in
Canterbury. Other associations include:
●
Company A, West Midlands, the United Kingdom – Gauge and Toolmakers Association,
who provide advice on the training and skills development programmes required by SMEs.
●
Independent Line Services, Canterbury, New Zealand – Electricity Supply Industry Training
Organisation (ESITO), where a representative from the ESITO consults with the company
at least once a year regarding the organisation’s programmes.
●
Lakewood Court Rest Home and Straven House, Canterbury, New Zealand – New Zealand
Aged Care Association, which has an annual conference, and offers occasional training
and professional development days.
Eight SMEs identified that there is a general lack of networking and/or clustering
within their region or industry sector. The main reason identified was competition. Oxalis
Consulting and Development, East Flanders, Belgium stated “… to obtain successful
networks, they should be void from commercial opportunism”.
Two good examples of formal collaboration are provided by the Canadian
Manufacturers and Exporters (CME) Association of Manitoba, and by the mutuelle de
formation Formaplus in Québec. The CME developed a programme called Consortia (further
details presented in the box below), which is aimed at companies who are committed to
improvement and have a willingness to share their success stories and the challenges they
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Box 4.2. CME Consortia programme
Consortia are formal groups of ten to twelve companies, mainly SMEs, with the goal of
achieving step changes in business performance. These groups of enterprises, which are
not in competition, come together to create a learning circle, meeting monthly in rotation
at each of its members’ places of work. There, they review the planned actions taken by the
local firm where the meeting is taking place and share views on problems raised. In order
to monitor together the progress for the local introduction of the innovation they are
pursuing (ex. Lean production), they either undertake a presentation and discussion or,
more often, shop floor visits done in sub-groups. The purpose of these meetings is to
observe collectively the situation in each firm, discuss the problems encountered, and
propose improvements. Many circles can be created around a common theme (e.g. Lean
production, sustainable development or operational excellence), which come together and
organise shared, ad hoc education and training, or expertise activities and services.
This inter-learning process is strongly supported by a non-formal environment that
facilitates sharing and “stealing” of innovative practices. Each Consortium is supported by
CME Manitoba. Besides forming these small groups of non-competing firms, CME provides
them with a facilitator, to ensure continuity and reporting, while also helping to find
resources to meet specific short-term needs. In addition, CME Manitoba organises
leadership training and other advanced courses. To train mentors on the Lean approach, it
offers Kaisen training courses that run for nine days, distributed over a three week period.
CME also facilitates cross-consortia exchanges, by networking three to four consortia
around a common theme and offering them joint activities, and sometimes, on demand,
creating special interest groups (SIGs).
Work Metals joined the Consortia group focusing on Lean production in 2009. The manager
of the company noted the benefits of Consortia group stating its “… ability to draw from
other’s experiences. Everybody in the Consortium is at a different stage in their Lean
journey … and we have been able to share experiences and learn things from every
company”. The Consortia works on a 14 month cycle, made up of 12 monthly local visits
(no meeting in July) and a strategy planning session.
Tick Control System designs and produces specific metal products for other large or
smaller firms active in different industrial sectors. The firm joined the Consortium on
sustainable industrial development in order to better face the challenge of global competition
and increased costs, by sharing experiences with non-competing companies facing similar
problems. In this way, they aimed to improve productivity and quality of production, and
to create an environment conducive to stronger employee involvement.
The monthly meetings “… generated ideas. We pick innovations from the others and
share best practices, but we implement them differently”. The consortium also gave direct
access to sources of information and expertise. This consortium added joint special
activities like group study visits in other provinces and specific, organised training based
on a problem-solving approach.
This sharing of “outsides eyes” provides a horizontal inter-learning process matched
with a self-managed network of external expertise and training, which is making
Consortia a unique innovation. Such group-based exchange mechanisms offer a creative
solution to the challenge of ensuring relevant and continuing skill development within
small and medium sized enterprises.
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have experienced. The CME also provides support, including training and networking. One
of the benefits of joining the Consortia group is learning from other companies’
experiences.
The case studies show that collaboration between firms is occurring externally; with
firms collaborating to share, exchange, advise, consult and learn from external
organisations. A number of approaches were utilised by SMEs, including:
●
Co-operation with customers for product development.
●
Training by suppliers.
●
Networking using the Chamber of Commerce, Associations and with other companies as
a forum to exchange experiences and ideas, learn from each other, and consult together.
●
Clustering with other companies to share knowledge, advice and defend common
interests.
The CME and the WEM, together with the Manitoba and FormaPlus in Québec, Canada,
provided innovative examples of collaboration/networking between SMEs, as well as
opportunities for training and skills development. However, collaboration does not always
occur, often due to competition between firms and a lack of willingness by companies to
interact. Figure 4.7 illustrates the dynamics of SMEs’ collaborations, and categorises the
motivations for these collaborations.
Figure 4.7. Motivation and collaboration – SME model
Suppliers
• Training
• New recruits
• New machinery
• Maintenance
Customers
• Before/during production/
service delivery
• Develop ideas
• Exchange knowledge
• Develop client base
Co-operation/
collaboration
Training
Tertiary institutions
• Exchange skills
• R&D
• Foster partnerships
• Share information
• Inform practical training
Motivation
and collaboration
Clustering
Other companies
• Share knowledge
• Defend common interests
• Advise each other
• Disseminate knowledge
Networking
Associations,
Chambers of Commerce,
Committees,
Working Groups
• Consultation
• Forum to exchange ideas
and experiences
• Learn from other firms
and industry peers
SMEs’ responses to climate change
According to Martinez-Fernandez et al. (2010: 4): “The impacts of climate change, and
especially subsequent mitigation and adaptation policies, on labour markets are still
largely unknown despite the recent demand for knowledge production and diffusion on
this topic increasing…” This section hopes to increase the knowledge into the effects
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climate has on SMEs in relation to new job profiles and climate change regulations. It
should be noted that only 11 of the SMEs interviewed, which were mostly small to medium
sized firms, ranging from new to mature, were associated in some way with the “green
industry”. These SMEs were mostly from the manufacturing, business and agricultural
economic sectors. However, just over half of the SMEs interviewed (16 SMEs) identified a
number of reasons for being engaged in organisational modifications due to climate
change. These reasons are in relation to:
●
Marketing.
●
Requirements of the firm.
●
Initiatives within the firm.
●
Education and clustering.
Marketing – the interviews revealed a variety of climate change marketing approaches,
which include:
●
As part of the firm’s mission statement – Sylva nurseries, in East Flanders, Belgium
states that they “… want to grow forests and hedging plants in a socially responsible
way, for a green environment in Europe”.
●
Achieving awards – Sylva nurseries also has a commitment “… to a socially responsible
entrepreneurship [which] has even [been] praised internationally. In 2009, Sylva was
granted the title of ‘International grower of the year’. Next to [its] commitment for
employees, it received this award for its efforts in the domain of environmentally
friendly production.”
●
Projects – Burrick, a metal construction company in East Flanders, Belgium, stated
“… ecological awareness is slowly but steadily getting integrated in Burrick’s corporate
strategy. They have hopped on the ecological bandwagon with projects on solar panels
and windmills, because they felt there was an increasing demand in this market.”
●
Using green energy – The Combell Group, information technology (IT) infrastructure and
hosting solutions, East Flanders, Belgium noted, “… the environment is an important
item at Combell Group as they use 100% green energy”.
●
Using more environmental friendly devices – Groenidee, a landscaping company in East
Flanders, Belgium stated that they “… make an effort to use more environmentally
friendly devices, reduce waste and make responsible use of insecticides. … there is no
need to pretend we are saints, it also happens to be a trendy marketing tool”.
●
New products – Opel Willy, new and used cars, repairs and rental, East Flanders,
Belgium, stated: “… the company is considering joining the new trend on green
economy, by introducing electric car rental.”
●
Raising awareness – solar energy company, OSTIM in Ankara, Turkey, noted that their
“… technical staff should be able to explain the benefits of renewables and convince the
customers to invest in renewable energy. Technical staff also have a mission to raise
awareness on the importance of renewables…”. As a result of this, the solar energy
company requires their technicians to develop social skills, so they can “… speak a
language which can be understood by an ordinary person who does not have
information about renewable energy”.
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Requirements of the firm – This relates to compliance with environmental regulations,
accreditation, and skills needs such as:
●
Burrick, a metal construction company in East Flanders, Belgium – needs to make
“… explicit efforts to meet legal requirements, in order to obtain some useful ISO
certificates”.
●
Company E, which manufactures automatic and manual transmissions in the West
Midlands, the United Kingdom, noted that the “… company’s main customers [such as
Ford and Chrysler] expect them to be accredited with ISO 1401 [Environmental
Management Systems international standard] and the TS16 949 [international standards
on quality management systems for automotive-related products]. The company needs
to comply with EEC regulations. They were ISO 1401 accredited in 2003.”
●
Independent Line Services Ltd, an electricity network contracting company, Canterbury,
New Zealand – notes that they are “… required to use sustainable practices, but this isn’t
having a strong effect at present. There is a push to put lines underground, and [they] are
preparing for that to continue.”
●
Company A, fixturing and gauging, West Midlands, the United Kingdom, stated: “The
company complies with the required environmental regulations… these are mainly
concerning waste disposal… However, they have found the process to obtain a
certification for their environmentally friendly activities is quite complicated. For that
reason, they have not conducted that process, and thus, these activities are not formally
recognised.”
●
A medical company in the industrial zone of OSTIM, Turkey, noted, “… they received ISO
4000 quality certificate and took precautions for recycling”.
●
The renewable energy company in OSTIM, Ankara, Turkey, identified that climate
change is: “… related to their core business and therefore they need a labour force skilled
on the subject. As the level of technical knowledge they need increases with the
advancement of technology in the field, they require technical staff with new
qualifications. However, it is not always possible to find such people.”
Initiatives within the firm – a number of the SMEs interviewed are taking the initiative to
be more environmentally aware/conscious, such as: incorporating a vision into their
company’s mission statement (e.g. Sylva nurseries); moving their headquarters to a more
environmentally friendly building (EcoPuur); lobbying for the business centre to become a
“green zone”, which would require all SMEs to take ecological measures (EcoPuur);
introducing new machinery that filters all the water that the company puts down their
drains (EFI Engineering Ltd); adopting new manufacturing principles so workers on the
factory floor are involved in identifying ways to eliminate waste and organising their
workstations more efficiency (Windflow Technology Ltd); and energy saving measures such
as the medical company in OSTIM, Ankara in Turkey, who have achieved a 70% reduction in
electrical energy usage and a 60% saving on water usage. The company “… aim to increase
savings to 90% and they need to hire a new engineer for this purpose”.
Education and clustering – The West Midlands, the United Kingdom Company B, which
undertakes research and promotion of organic gardening, farming and food, is directly
involved in conducting and fostering good practices for a sustainable environment, which was
supported by environmental regulations. Opel Willy, new and used cars repairs and rentals in
East Flanders, Belgium, whose owner was able to rally together companies in the industrial
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zone around the topic of waste recycling. “He took measures to reduce and carefully sort waste
by arranging a waste container for all the companies in the neighbourhood.”
Some issues associated with the green economy and the impacts of climate change on
SMEs as discussed by the firms are associated with: accreditation and requirements – the
process to obtain certification is long and complicated; cost – disposing of waste in a proper
way is expensive; green skills – the difficultly is finding qualified technical staff; and
regulations. Four SMEs identified issues with environmental regulations and policies:
●
EcoPuur (ecological appliance engineering and installation, East Flanders, Belgium), stated
that: “… ecological appliances are artificially manipulated by the government… Policy
changes in subsidy schemes… had a more negative effect than the economic recession.”
●
Company B (research and promotion of organic gardening, farming and food, West
Midlands, the United Kingdom), has been deeply affected by changes in policy directions
and cuts in funding.
●
Company C (services related to low carbon energy technology, West Midlands, the United
Kingdom), states: “… the environmental market in the United Kingdom is too regulated.
Policies on environmental compliance do not necessarily increase demand for highlyskilled environmental technologists. Fees are kept artificially low, without any incentive
for excellence.”
●
Company D (produces liquid bio-methane, West Midlands, the United Kingdom), noted
that there “… is a large range of different opportunities available to reduce carbon
dioxide (CO2) emissions”. Nevertheless, the interviewee did not know why the central
government has chosen to support limited solutions (such as electrical vehicles), which
will not be enough to achieve CO2 reduction targets.
●
Solar Energy (Ankara, Turkey), expressed: “… that they would like to apply for the support
schemes the Ministry of Environment and Forestry provided for decreasing carbon
emissions, and therefore need training on how to apply for this support programme.”
Climate change has had an impact on SMEs in four main ways:
●
Used as a marketing tool, such as part of a mission statement, receiving awards,
undertaking projects in renewable energy, utilising green energy, implementing
environmentally friendly devices, introducing new products, and raising awareness of
potential customers.
●
Organisational requirements, to achieve environmental accreditations, meet legal
requirements and regulations, achieve sustainable practices, or part of the core business
of the company.
It should be noted, however, that there were a number of issues associated with climate
change requirements, especially related to environmental regulations, such as policy
being in a constant state of change, or the environmental market being too regulated and
the regulations also manipulating the market too much. Additionally, some SMEs stated
that there is not enough policy support. There were a few accreditation issues raised,
such as the process being long and complicated, and even some cases where SMEs need
to undertake training to apply for such schemes, which makes it costly.
●
Company initiative, such as applying energy saving measures and lobbying.
●
Education and clustering.
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Although the SMEs did not go into detail concerning the impacts of these
modifications on job profiles and training and skills development, these changes
would have created new jobs and/or altered established ones to bring about these
modifications. In which case, staff would have needed some sort of training or skills
development, either in knowledge or in technical capabilities, to fulfil the
requirements of their position. More research into this area is required to analyse the
full impact of climate change on SMEs.
These four impacts are summarised in Figure 4.8.
Figure 4.8. Climate change – company modifications
Marketing
• Mission statement
• Raising awareness
• New products
• Becoming environmentally
friendly
Education and clustering
• Research and promotion
• Grouping companies
• Waste recycling
Climate change
– company
modification
Requirements
• Environmental accreditation
• Meet legal requirements
• Environmental regulations
• Sustainable practices
• Core business
Initiative
• Energy saving measures
• Lobbying other businesses
• New manufacturing
principles
• Minimise pollutants
Conclusion and policy implications
The participating countries’ case studies provided a rich picture of the processes
involved in training and skills development within SMEs of various sizes, maturity and
economic sectors.
Impacts of the global financial crisis
The financial crisis has generally had a negative impact on SMEs, with a decline in
sales and reduced government budgets, which results in staff redundancies, a decline in
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recruitment, and reduced training budgets. The nuances of these decreases were not
picked up in the cross-country survey. These declines have impacted employee motivation
and work quality, and ultimately led to a decline in innovation.
However, some SMEs were not affected by the financial crisis because they were small
and had fewer overheads, such as on-the-job training, which does not require training
budgets, and in some cases, firms experienced an increase in demand. While some firms
chose to ride out the financial crisis, others reacted by restructuring their company focus,
and/or by implementing a sales department to increase clientele and thus diversify their
market and training innovation.
Structured training systems and formal training programmes
The more mature and larger SMEs tend to have a developed training and skills
structure. These firms usually have a department or section devoted to this within their
human resources, quality, sales or research and development areas. Performance
appraisals and/or assessments are commonly performed with employee input, position
skill requirements are judged, and training recommendations proposed. A company and/
or employee training plan or programme is developed based on the training
recommendations, however, the training plan is in turn affected by the allocated budget.
Formal training results from a company’s training plans and is usually conducted as
external courses through universities or colleges, private training firms, the local Chamber
of Commerce, regional organisations, or industry institutions. However, there are a number
of issues associated with formal training courses, including that the associated curriculum
is often too broad, is designed for large companies, and/or is not practical for staff. These
issues negatively impact on both the willingness of the staff members to participate in
training, and the company’s involvement due to cost. In such a case some SMEs, due to
their niche market and thus skills requirements, resort to hiring private training firms,
which in many cases prove very expensive.
Firms are also restricted by staff absences, which impact on product processes, and
often there is a lack of short courses available to accommodate these needs. Although in
many countries there are public subsidies and/or funding available for SMEs to participate
in formal training, there is a lack of information available, and the process to obtain these
benefits is often too complicated and fragmented. Nevertheless, formal training when
undertaken, benefits the firm by covering skill needs or gaps, providing accreditation and
standards, and assisting with a productive work environment and thus company growth.
Employees also benefit by gaining skills and knowledge, qualifications, self-confidence and
motivation, and sometimes entrepreneurial behaviour.
Formal training is an investment in the firm’s future, however, overcoming the
restrictions and issues that SMEs face is one of the main challenges for training and skills
development.
The importance of alternative training methods for SMEs
Informal (KISA) skills are the most common employee competency development
approaches utilised by SMEs, this is due to the minimal cost outlay, time efficiency and
numerous other beneficial outcomes. KISA skills development is often completed on-thejob where the staff member can build up their hands-on experience and interactions with
other staff. Mentoring is an especially important technique for new employees, which
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assists with knowledge building, understanding of job content, develops company focus,
and provides assistance when required.
Team/staff meetings also benefit staff through discussions on techniques, ideas,
knowledge and work reviews. These meetings also strengthen collaboration between the
staff and company executive, improve processes and performance, and provide an
innovative work environment. Some firms provide company training sessions run by an
internal expert, while others implement research and development projects with the
assistance of government funding. Teamwork introduces staff to problem solving skills
and team building experiences. Although informal/alternative training does not gain a
qualification (accreditation), it is the most appropriate form of skill development for SMEs
and should be recognised more highly when designing policy instruments.
SME motivation and collaboration with other organisations/companies also offers
opportunities to share information, exchange knowledge, provide advice, develop ideas and
learn from each other’s experiences. There are four techniques utilised by SMEs, including:
collaboration/co-operation (especially with customers); before and during production/
service delivery; and, to a lesser extent, tertiary institutes; and other companies.
Networking through associations, the Chamber of Commerce, and with other
companies is not often utilised by SMEs, but does offer a forum in which to exchange ideas
and experiences. Similarly, clustering with other companies is not often utilised, but
provides associations with working groups, committees and trade associations. The
collaboration between companies and organisations within the region provides
opportunities for all involved, which not only promotes competency development but also
provides a framework for innovation.
Climate change impacts on SMEs
Climate change is a recent phenomenon that is impacting upon the SME sector.
Although currently these effects are only minor, the potential for future impacts, both
positive and negative, is a real possibility. Currently, some firms are using climate change as
a marketing opportunity to gain clientele and create new markets. Achieving environmental
accreditation and complying with environmental regulations is frequently a burden to SMEs,
as it is often slow, complicated and costly. However, although climate change can be seen as
a burden, it will create opportunities for SMEs to innovate and create new market niches.
Government support can assist SMEs to work through these changes, regulatory
requirements and accreditations, to ensure the future of this important economic sector.
Informal training systems and the need to involve SMEs in policy development
Nevertheless, it can be stated that the SMEs’ skills and training development is an
untapped niche for private training operators. Prospective opportunities exist as the Internet
becomes an increasingly important tool for providing specialised services and “made to
order” training advice and courses, which can be delivered onsite at a time suitable to
business needs. This marketing opportunity has the potential to overcome the skills and
training development challenges that SMEs encounter and thereby promote innovation, not
only in the skills and training market, but also within the SMEs’ future business operations.
The SME case study interviews highlight the fact that skills development is a resource
intensive activity, and the majority of SMEs rely on informal (KISA) training methods to
tailor their skills needs. These skills needs are in response to market forces both in-house
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and externally within their supply chain or industry, rather than as a consequence of
public sector skill development programmes. There is a need for formal training
organisations and providers to understand the importance of informal training for SMEs
and the potential that exists to develop a pathway for informal skills development to be
recognised by qualifications. This process will require a greater role to be played by both
industry and employee organisations in order to transmit and integrate SMEs’ views. It is
essential that when policies are developed, SMEs’ views are taken into consideration and
are not swallowed up, due to their size, and thus stopped from participating in this process.
The path towards obtaining informal training qualifications should also be
supplemented by evaluating the impact of skills development and policy interventions,
which can provide important evidence to SMEs of the value of their training investments
and the tangible return on investment. Again, co-ordinated efforts from policy makers and
both industry and employee organisations are essential, as these evaluations should
encourage policy innovation by learning from SMEs’ experiences and knowledge, and being
able to communicate these effectively.
Notes
1. Holistic approach to enable businesses to improve their profitability and competiveness through
identification and elimination of wasteful practices – by focusing organisations on “value adding”
activities, non “value adding” activities are minimised.
2. Practices that focus upon continuous improvement in manufacturing, engineering and
management; activities that continually improve all functions and involve all employees to
eliminate waste; applies to processes, such as purchasing and logistics, that cross organisational
boundaries into the supply chain.
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Skills Development and Training in SMEs
© OECD 2013
PART I
Chapter 5
Skills and training ecosystems
by
Cristina Martinez-Fernandez and Tamara Weyman
The focus of this chapter is the results of workshops and study visits to the case
study areas, intended to determine the skills needs, issues around developing
training and competencies, the role of networks in skills development, and the
outcomes of skills and training development activities. Combined with the survey
results, a skill ecosystem (clusters or networks between firms and skill development
institutions) is mapped for each of the case study regions, illustrating the levels of
interaction between small and medium sized enterprises (SMEs) and the
organisations in their area considered by them to be important for their skills and
training development.
A synthesis analysis was then undertaken, comparing and contrasting the
similarities and differences across the different regions. Of particular note was the
finding that skills and training development policies need to be individually focused
for their local area. Policy implications, based on the results of the research data,
note that a key challenge for policy makers is how to combine a diverse range of
policy instruments across a wide range of portfolios in order to manage an assorted
bundle of ecosystems. The importance of regional networks and locally appropriate
policies are emphasised.
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The skill ecosystem concept
This section provides an introduction to the skill ecosystem concept and analysis from
the skill ecosystems workshops carried out in each of the participating countries: Belgium,
Canada, the United Kingdom, New Zealand, Turkey and Poland. A key feature of the
methodology for this project was a workshop and study visit to the case study area by the
OECD Secretariat and a delegation of international experts in the subject matter relevant to
the research project. This allows for an exchange of ideas, and discussion between local
stakeholders and international experts. In the Leveraging Training and Skills Development
in SMEs (TSME) project, the subject of the workshops was an analysis of the skill
ecosystem, and interaction between skill providers and skill and training receivers
(businesses). The workshops had four themes:
●
Skill needs.
●
Training and competency building in SMEs.
●
The role of networks in skill development.
●
Outcomes of skill and training development.
After each of the workshops, a local ecosystem map for each region was drawn up, this
summarises and visualises the predominant actors and interactions in each of the seven
case study areas. The maps are presented throughout this chapter.
Understanding skill ecosystems
Recent literature argues that there is much to be gained from a workforce
development approach and an understanding of skills formation as it occurs in the context
of the skill ecosystem. Hall and Lansbury (2006) state that there is a need to move beyond
narrow ways of thinking about training for particular jobs or firms and adopt the broader
notions of “skills and ecosystems” and workforce development. The concept of a skill
ecosystem is that it “… directs attention to the interdependency of multiple actors
and policies in creating and sustaining the conditions under which appropriate skills
can be developed and deployed in clusters of firms in particular regions” (Hall and
Lansbury, 2006).
Effective skill formation policy also demands an appreciation of workforce
development as an alternative to traditional approaches centred on the provision of
training in discrete competencies. The concept of workforce development is consistent
with the skill ecosystem idea because it captures the importance of the broader context in
which skills are utilised, it recognises that there are a range of parties who affect and are
affected by skill formation and it reaches beyond the narrow confines of formal training
institutions (Hall and Lansbury, 2006).
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The definitions for skill ecosystems vary according to context, including the
understanding of “place” as a city, region or area of socio-activity:
●
Buchanan et al. (2001: 21) – “… clusters of high, intermediate or low-level competencies
in a particular region or industry shaped by interlocking networks of firms, markets and
institutions”.
●
Loble (2005: 6) – “… clusters of inter-related skills and knowledge within regions and/or
industries, driven by factors like technology choices, competitive influences, culture,
structure, regulation and organisation of work”.
●
Smith (2006b) – “… communities of interrelated and interacting organisations working
as a coherent entity to increase opportunities for sustainability, innovation and growth”.
●
The NSW Department of Education and Training (2008: 5) – “… a self-sustaining network
of workforce skills and knowledge in an industry or region”.
However, a unifying feature of all the definitions of skill ecosystems is that they relate
to the clusters and/or networks between firms and skills and training institutions, ideally,
as Smith (2006b) states, to support sustainability, innovation and growth.
Important elements in the skill ecosystem are the establishment and cultivation of
regionally based networks and partnerships organised around the principle of workforce
development. According to Hall and Lansbury (2006), there is merit in encouraging the
development of regional and industry specific networks, which bring together public and
private training providers (colleges, universities, other training providers), employers,
industry representatives, unions, labour market and training intermediaries (temporary
work agencies and group training companies), local and regional government agencies and
community representatives. As Hall and Lansbury (2006) state, the government plays a
critical role in acting as a catalyst providing an appropriate policy context and support in terms of
resources infrastructure and an institutional framework for the establishment and
operation of the networks. Smith (2006) illustrates the skill ecosystem dynamics of open
communication and adaptive iteration in Figure 5.1.
Figure 5.1. Skill ecosystem dynamics
Open communication
Establishing ground rules
Common goals
Commitment
Identification and credibility
of stakeholders
Identification of resources
Agenda setting
Identifying subgroups
Knowledge sharing
Exploring options
Maintaining trust
Building external support
Structures and governance
Collaborative and adaptive
partnerships
Agreements
Adaptive iteration
Source: Smith (2006).
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The following sections outline the case study regions’ skill ecosystems. For each case
study, a regional map was developed illustrating the level of interaction between SMEs and
skills and training development organisations. These figures were developed from results
obtained from the company based survey.* In the survey, firms were asked about their levels
of interaction with a number of different types of organisations, including universities,
vocational training institutions, industry associations, trade unions, government
departments and so on. Space was also provided for firms to nominate other organisations
that they considered to be important for the skills and training activities within their firms,
but that were not mentioned in the survey. The results from the survey were then illustrated
in these ecosystem maps. The size of the text is proportional to the importance of an
organisation within the skill ecosystem of an area, while the map in total shows all the
organisations that were listed by the firms.
West Midlands skill ecosystem (United Kingdom)
The United Kingdom’s West Midlands’ skill ecosystem diagram can be seen in
Figure 5.2. The West Midlands’ ecosystem is dominated by industry training organisations,
private training providers and universities, which provide formal training and specialised
knowledge. The illustration shows a broad range of SME collaborations occurring within
the West Midlands region, which may be a good starting base from which to promote the
SME skill ecosystem within this region.
Figure 5.2. West Midland’s skill ecosystem
Local
community
organisation
Other education
providers
Private
consultants
Private training
Government
providers Departments
Other parts
of the same
enterprise group
Institutes of technology
Industry training
organisations
Universities
Firms’
value-chain
Chambers
of Commerce
Business
organisations
Trade Unions
Local
councils
* The company survey is the subject of Chapters 2 and 3.
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The workshop noted trade associations and industry organisations as key players
within the West Midlands’ skill ecosystem, as they are directly relevant or answerable to
their members, have a clear understanding of the sector-based issues and are responsive
to industry needs. Other important key players are the charitable organisations, as they are
flexible to SME needs, however, are under constant strain because of public funding
cutbacks. The public sector was seen as being slow to react, subject to political demands,
and with a complex structure, thus making it difficult for SMEs to interact with them. Trade
unions were seen as potential key players, however, SMEs have a very low unionisation
rate, which mitigates the benefits. If large companies within the region had an obligation
to train their employees, this would then trickle down to the SMEs, however, the large
companies no longer consider this as an obligation.
Labour market intermediaries have an important role to play in bringing together the
demand and supply side of the labour market by improving information, job brokering, and
the promotion of effective recruitment actions, and enhancing the ways that agencies
work together with employers and individuals to stimulate demand. The regional
development agency (RDA) in each English region has the responsibility for sustainable
economic development.
The Advantage West Midlands RDA developed the West Midlands Economic Strategy
and Action Plan 2004-10, they also worked in partnership with other organisations through
the Regional Skills Partnership (RSP). The RSP offered a forum for employers, learning and
skills providers and other public bodies to collectively influence how the delivery of skills,
workforce development, business support and labour market service can provide the best
support for regional businesses and deliver the Regional Economic Strategy.
According to the workshop, there is great complexity within public agencies and
business organisations, the emphasis being not so much on the “functioning” of the
system, but rather the assortment of agencies from the strategic through to the local
created complexity, which contributed to a lack of functionality.
West Midlands skills needs/deficits include management, social, technical,
entrepreneurial, green and industry specific skills. Workshop suggestions to achieve these
skill developments for the region were: speed up training outputs/outcomes; enhance
responsiveness (shifting skills emphasis); system streamlining; address cultural issues
within firms and by individuals; and re-orientate the type of training provided.
Other issues that affect training and competency building in SMEs include: industry
sector restructuring; company issues (cost and time – practical feasibility); fear of staff
poaching; actual skills of owners/managers; complexity and inflexibility of the system of
training (availability and subsidies); training tends to focus on highly skilled staff; an
under-utilisation of graduate skills; training projects do not match the SME reality;
disadvantaged groups remain disadvantaged; and the region employs migrant workers,
thereby overlooking the local region. Workshop suggestions to remedy these issues
include: enhance the cost effectiveness of training, thus blending training formats;
measure the impacts of training, which will help demonstrate the training and skills
development benefits to SMEs; a definite focus shift is needed to allow SMEs to advise
training providers of what they need, rather than the providers telling the SMEs what they
have to offer; and development of the West Midlands Graduate Internship Scheme.
The institutional landscape of skills in England was reshaped in the two months prior to
the workshop, with “streamlining” and “simplification” at the forefront of the changes. Two
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new agencies were developed to replace the Learning and Skills Council (LSC), which were the
Young People’s Learning Agency (YPLA) and the Skills Funding Agency (SFA). The Machinery of
Government changes and developments in skills governances, coupled with post General
Election 2010 policy changes, meant that this is a period of transition for the region.
East Flanders skill ecosystem (Belgium)
The Ghent region ecosystem diagram (see Figure 5.3) is dominated by Institutes of
Technology, business organisations, and industry training organisations. East Flanders
SMEs have a heavy reliance on internal knowledge intensive service activities (KISA) skills
and training development activities.
Figure 5.3. East Flanders skill ecosystem
Other education
providers
Government
Departments
Chambers
of Commerce
Other parts
of the same
enterprise group
Private
training
providers
Business organisations
Institutes of
technology
Industry training
organisations
Private
consultants
Universities
Trade Unions
Local community organisation
Firms’
value-chain
Local councils
The East Flanders skill needs/deficits include social, generic, technical and industry
specific skills. The primary workshop suggestion was for the education system to focus on
the skills to learn, and also to create an attitude for learning.
The East Flanders training and competence development issues include: cost and time
(SMEs’ practical feasibility); the fact that growth and development is spontaneous; the
background and skills of the owners/managers of SMEs; a lack of willingness by employees;
the landscape of training is complex and inflexible (availability and subsidies); and the
disadvantaged remain disadvantaged.
Policy response suggestions developed from the workshop include: examining the
types of learning, for example, low-skilled workers are more open to informal learning
such as mentoring; making training more flexible with shorter courses; authorities raising
awareness of the added value of training to SMEs; training should be linked to a broader
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framework within SMEs; promote the fact that industry funded organisations are
able to organise training quickly; create a general website or organisation that offers a
clear overview of training possibilities; and use intermediaries or consultants who can
guide SMEs.
East Flanders has a variety of network/stakeholder opportunities including: trade
associations/industry organisations for specific sectors, which can provide expertise, advice,
training, and a network in which to exchange experiences; the public sector for accredited
training (although very basic and broad) and government support such as education
cheques, SME Portefeuille, and grants for educational leave; private training firms for
coaching, teaching and consulting, however, non-subsided firms are expensive; the
European Commission’s European Structural Fund (ESF) project grants; employment services
and agencies such as the VDAB website “become what you want”; network of enterprises
such as the Godfather project implemented by VOKA; other companies sharing newsletters
and the Belgium Positive Entrepreneurs; and tertiary institutions for apprenticeships and
courses, which, however, are often considered inflexible for SMEs’ needs.
SMEs in the East Flanders region generally find it hard to locate workers for specific jobs,
as a result of which, staff have to be brought in from outside the region. To mitigate this
trend, Flanders needs to develop a good image of training and investment in people for the
region. The recent financial crisis had a negative impact on training and skills development
within the SMEs in East Flanders, but no detail was given. To lessen the impact of the
financial crisis, it was important for SMEs to distinguish, within a strong network, flexibility
and a good training programme. It was pointed out that some SMEs use climate change as a
marketing strategy to attract more clients, as was discussed in the previous chapter.
Canterbury skill ecosystem (New Zealand)
The New Zealand (NZ) workshop focused on four themes: skill needs; training and
competency building; the role of training networks; and the outcomes of training and skills
development. Each theme began with a presentation based on survey results followed by
small discussion groups.
The main actors in the New Zealand Canterbury region’s skill ecosystem (see
Figure 5.4) are the Chamber of Commerce, industry training organisations, private training
providers, private consultants, and institutes of technology. Again, an important element
of skills and training development within Canterbury SMEs is internal (KISA), company
specific training. Christchurch Polytechnic Institute of Technology convened a steering
group, which has organised education and training provider forums to identify regional
training needs, gaps and priorities as part of the Tertiary Education Commission
programme. The forums proved to be successful, nevertheless, with the change in
government, the programme is being phased out.
The Canterbury region’s skill needs/deficits include management, social, generic,
technical and industry specific. To alleviate these skills deficits, the workshop offered the
following solutions: promote available training options to SMEs; SMEs to form partnerships
with private training enterprises; and greater involvement between industry and career
education in schools.
Canterbury’s training and competency development issues include: SME generic issues
(cost and time) and practical feasibility; the background and skills of SME’s owners/managers;
company’s productivity/competitiveness objectives; networking issues (fragmentation); and
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Figure 5.4. Canterbury’s skill ecosystem
Local
councils
Other
education
providers
Trade Unions
Firms’
value-chain
Universities
Business
organisations
Government
Departments
Private
training
providers
Local
community
organisation
Other parts
of the same
enterprise
group
Chambers
of Commerce
Institutes
of technology
Industry training
organisations
Private
consultants
young persons. Policy response suggestions: policy needs to cater for young people who drop
out of school but would like to re-engage via training options; SMEs need to develop a positive
training culture; and a need for greater co-ordination and communication.
Current networks within the Canterbury region include: trade associations/industry
organisations who, at a national level, have a legal responsibility to work with their
industries to create strategic plans and then inform the provision of training; tertiary
networks such as the Canterbury Training Providers Association and Canterbury Tertiary
Alliance (for students); informal networks as the result of the regional facilitation
programme; and industry partnerships such as the Trades Innovation Institute at the
Christchurch Polytechnic Institute of Technology (CPIT). Further detail on New Zealand’s
regional facilitation programme is presented in the next section.
New Zealand’s regional facilitation programme
The programme was implemented by the Tertiary Education Commission to
encourage regional training networks, facilitated by the local institute of technology or
polytechnic (ITP). The Christchurch Polytechnic Institute of Technology convened a
steering group that had organised education and training provider forums to identify
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regional training needs, gaps, and priorities. As a result of this, a Regional Statement of
Tertiary Education Needs, Gaps and Priority in Canterbury, 2008-10 was developed and
then fed into the development of a Canterbury regional labour market strategy. However,
the regional facilitation programme is being phased out after a change in government
policy, but had shown that a “network of networks” could produce positive outcomes for
learners, trainers and employers.
Outcomes of training and skills development for local firms within the Canterbury
region include: specialist clusters, but only within Christchurch City; in regional areas, the
primary sector is having difficulties attracting staff; and SMEs that rely solely on in-house
informal skills activities may miss out on adopting new technologies. Networking with
other firms or participating in training events could mitigate this concern.
Zaglebie skill ecosystem (Poland)
In the opinion of the workshop participants, the Zaglebie sub-region is characterised by
the poor development of business environment institutions. This is despite the fact that
there are numerous business support organisations located in the region, which have thus
been criticised by the companies participating in the workshop for not being active. As a
result, Poland’s Zaglebie region’s skill ecosystem is dominated by private training enterprises
either providing tailor made training or unrealistic European Structural Fund (ESF) project
opportunities, followed by industry training organisations and other education providers
(Figure 5.5). The workshop highlighted the lack of co-operation between SMEs and local
universities.
Zaglebie skill needs/deficits relate to: management, social, technical, cultural,
entrepreneurial and industry specific areas. Policy response suggestions: adjusting
education to the needs of employers; strengthening business support; and professional
support for business planning.
Figure 5.5. Zaglebie’s skill ecosystem
Trade Unions
Chambers
of Commerce
Universities
Firms’
value-chain
Government
Departments
Private
parts
training
of the same
enterprise providers
Other
Industry
training
organisations
Business
organisations
Private
consultants
Local councils
Other
education
providers
Local community
organisation
Institutes
of technology
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The Zaglebie region’s training and competency development has three main issues:
●
The landscape of training is complex and inflexible (availability and subsidies).
●
VET lacks the practical business skills and approaches.
●
Training companies’ ESF projects are not related to SME’s needs.
A number of policy responses were suggested:
●
A need for institutions to combine, through their services, the role of integrating
businesses and representing their interests, and their role of training and coaching.
●
Universities should be more practically orientated and facilitate the acquisition by
graduates of relevant business skills.
●
Basic economic knowledge should be treated as a key competency throughout the
education system.
●
Organise non-degree post graduate university courses based on the needs of local SMEs.
●
Training companies should build their ESF project offer based on the real needs of firms,
and on market research.
●
Assessors for the ESF projects should become familiar with the reality of conducting
business activities and with the real needs of SMEs.
●
There is a need to create tailor-made training packages for SMEs aimed at basic training
on finance and accounting skills, and strategic advice dedicated to future developments.
The Zaglebie workshop discussed the practicalities of co-financing mechanisms for
SMEs. SMEs generally do not participate in co-financing opportunities due to:
●
Institutional vacuum.
●
Over formalised procedures.
●
Predetermined indicators.
●
Length of assessment time
●
Changes in procedures and rules.
●
Confusing requirements.
●
Lack of eligibility for support.
Recommendations include:
●
Rules should reflect business needs.
●
Simplify procedures.
●
Inform businesses about possibilities.
●
Stronger intermediary institutions.
●
Aims and objectives should be based on regional strategies.
●
Training should be conducive to the needs of businesses.
●
Prioritise communication and co-operation.
●
Faster decision making.
The industrial zone of OSTIM, Ankara skill ecosystem (Turkey)
The industrial zone of Middle East Industry and Trade Centre (OSTIM), Ankara
workshop focused on four themes: skills needs; training and skills development in SMEs;
the role of training networks; and outcomes of training and skills development.
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The industrial zone of OSTIM in the Ankara region’s skill ecosystem diagram can be
seen in Figure 5.6. The ecosystem is dominated by private consultants, paid advisors and
private training providers, who provide specialised training and skill services, followed by
universities (VET), business organisations, and government departments who promote and
finance training activities. The organisations that SMEs work with include KOSGEB
(affiliated with the Ministry of Science, Industry and Technology) and ODEM (consultancy
and training company of OSTIM), followed by the Ankara Commerce of Industry, Gazi
University and OSTIM Management (organised industrial zone management company).
Figure 5.6. OSTIM skill ecosystem
Local
councils
Other parts
of the same
enterprise group
Private
consultants
and paid advisors
Government Departments
Industry training
organisations
Chambers
of Commerce
Business organisations
Further
education
colleges
Universities
Private training
providers
Local community
organisation
Other education
providers
Firms’ value-chain
Trade Unions
In the industrial zone of OSTIM, Ankara, training should be focused on the effective
management and organisation of SMEs, however, a major issue within Turkey is the low
levels of quality and quantity of intermediate staff and the lack of delegation of authority
by SME owners to those who have the skills.
The industrial zone of OSTIM, Ankara’s training and competency development challenges
include: SMEs do not consider training and skills development important, as a result of a lack
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of awareness of its potential benefits to their firm; SME owners fear that trained staff would
leave the company; lack of capacity (time constraints); insufficient quality of vocational
schools; and lack of participation in training or not enough interest from the private sector.
SMEs primarily need on-the-job training on specific topics, however, the only training that
seems to gain SME interest is compulsory training and information, and KISA.
OSTIM benefits from a large number of organisations engaged in training and skills
development, due to its proximity to the capital city and national bodies such as KOSGEB.
There are key organisations that provide co-ordination, training and finances to SMEs in
the industrial zone of OSTIM at the national, regional and local levels. However, it is
apparent that there is a need to enhance the governance system, providing an oversight
body that could co-ordinate the major players.
The lack of qualified managers in SMEs and the difficultly employing highly skilled
employees impact the SMEs’ ability to increase their market share and find new customers.
Not helping the situation is the lack of resources allocated by SMEs for hiring staff and
developing such skills within their enterprises. Creating awareness and educating SME
managers and owners in the benefits of training and skills development that can enhance
the innovation capabilities of firms is critically required. Co-operation between organisations
within the skill ecosystem is needed and new entrepreneurs require training and mentoring.
Manitoba and Quebec (Canada)
The Canadian regional survey results were interesting, as they reflect the variations in
SMEs’ levels of interaction with skills and training organisations (Figure 5.7 and Figure 5.8).
Private training providers, followed by the company’s value-chain, dominate Quebec SMEs’
collaboration. Manitoba SMEs collaborate with a number of organisations, more commonly
with industry training organisations and private training providers, followed by private
consultants and the company’s value chain. These differences most likely demonstrate
variances in economic sectors, social infrastructure, and regional policy between the
regions, and thereby emphasise the importance of regional/local policy response to SMEs’ skill
and training development.
Workshops were conducted in each province and were structured around three
themes: the need and demand for skills development in SMEs; the ways in which practices
and actors from the training ecosystem do (or do not) match SMEs’ needs; and proposals
leading towards the improvement of training and skills development in SMEs. Both
workshops concluded that there is an increasing demand for training and skills
development in SMEs, however, the following challenges were identified:
●
The lack of concerted efforts.
●
The importance of customised approaches better suited to the actual requirements of
the businesses.
●
The need for more information and communication.
●
The structural constraints and limitation SMEs are facing regarding their size, etc.
Both workshops noted the importance of in-service skill development as an
investment (in innovation, productivity and quality of life at the workplace) rather than an
expense. The benefits of training and learning are identified as: develops employees’
internal flexibility; provides more equal opportunities; improves self-esteem (conducive to
taking initiatives); increases employability; encourages a sense of loyalty; and improves the
quality of life at the workplace. Both workshops emphasised that public and private
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Figure 5.7. Quebec’s skill ecosystem
Institutes of technology
Other education
providers
Trade Unions
Business organisations
Firms’
value-chain
Private
consultants
Universities
Private training
providers
Industry training
organisations
Government
Departments
Local community
organisation
Figure 5.8. Manitoba’s skill ecosystem
Other education
providers
Private
consultants
Trade Unions
Chambers
of Commerce
Local community
organisation
Industry
Government
training
Departments
organisations
Institutes of technology
Universities
Business organisations
Other parts of the same enterprise group
Firms’
value-chain
Private
training
providers
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investments in skills and training development should be increased and group-based
initiatives and mechanisms used as an approach or strategy to facilitate training and skills
development in SMEs because of their need for proximity of services.
Synthesis analysis – trends and conclusions across all the case studies
Combining the different countries’ regional survey results reveals significant
variances between SMEs collaborating with other organisations for the purpose of skills
and training development and therefore gaps within the overall ecosystem (Figure 5.9). It
can be seen from the illustration that, for those SMEs who collaborate with external
organisations, this occurs mostly within a formal basis and generally interaction is with
private training providers and industry training organisations. Other moderate levels of
interaction occur with institutes of technology, private consultants, business organisation,
and the company’s value chain. The least interaction occurs with trade unions, local
councils and local community groups. However, these interactions can vary significantly
within the regional context.
Figure 5.9. SMEs’ overall levels of interaction with training organisations
Formal
Informal
250
200
150
100
50
In
st
In
du
st
r
or y tr
ga ai
ni nin
i tu
sa g
te
t io
so
ns
ft
ec
hn
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og
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iv
er
si
tie
s
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a
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de
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io
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ns
r
ga
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ni
am
sa
be
tio
Fi
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ns
o
sf
fC
ro
om
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s)
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ra
nt
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id
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er
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0
Source: TSME survey, 2011-12.
In comparing the different regions, it can be noted that the industrial zone of OSTIM,
Turkey and the West Midlands, the United Kingdom are more likely to fit the definition of
undertaking clustering and networks, as illustrated in Figure 5.10, having numerous key SME
skills and training development organisational linkages, yet without one organisation
dominating the interaction. The illustration on the next page brings together the current skill
ecosystems of the participating countries’ regions and emphasises the different levels of
collaboration between SMEs and skills and training development organisations across these
regions. This is especially emphasised for the two regions in Canada (Quebec and Manitoba):
●
110
Ankara region (Turkey) – SMEs collaborate with multiple organisations such as private
consultants, private training providers, business organisations and universities.
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●
West Midlands (United Kingdom) – SMEs also interact with a number of organisations
such as private training providers, industry training organisations, universities, and
business organisations.
●
Canterbury region (New Zealand) – has a high dependence on the Chamber of Commerce
followed by industry training organisations, private consultants, private training
providers, and institutes of technology.
●
East Flanders (Belgium) – there is a high dependence on institutes of technology followed
by business organisations.
●
Zaglebie region (Belgium) – SMEs collaborate with private training providers, and
industry training organisations.
Canadian regions:
●
Quebec – high levels of collaboration with private training providers, followed by the
company’s value chain, and private consultants.
●
Manitoba – significant interaction with industry training organisations and private
training providers, followed by private consultants and the company’s value chain.
Figure 5.10. Regional SMEs’ levels of interaction with training organisations
Industry training organisations
Institutes of technology
Universities
Trade Unions
Business organisations
Chambers of Commerce
Firms from the value-chain (suppliers, clients)
Government Departments
Private consultants
Private training providers
Local councils
Local community organisation
Other parts of the same enterprise group
Other education providers
350
300
250
200
150
100
50
0
OSTIM, Ankara
(Turkey)
East Flanders
(Belgium)
Canterbury
(New Zealand)
Zaglebie
(Poland)
West Midlands
(United Kingdom)
Quebec
(Canada)
Manitoba
(Canada)
Source: TSME survey, 2011-12.
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Figure 5.10 highlights the significant variations between the different regions
regarding SMEs’ interactions with external organisations, notably the lack of interactions
that are occurring in East Flanders’ SMEs, which is an area dominated by institutes of
technology, and also with the Zaglebie regions. Of note, is the lack of interactions with
trade unions across all regions, potentially due to the fact that SMEs are small businesses
and employees are not members of a specific union. There are also wide variances of
interactions with SMEs’ value chains, specifically, there is more interaction within the
Canadian regional SMEs compared to other case study regions.
These variations underline the regional context of where the SMEs are located, and the
need for individually focused skills and training development policies, reflective of their
local area. The illustration also shows the lack of SME collaboration with government
departments and the need for more policy dialogue, not only for investigating SMEs’ skills
needs, but also for the development of the policy response.
What seems to be evident within these participating country regions, (apart from the
industrial zone of OSTIM in Turkey, where they do have a level of clustering and networks
between organisations, and the West Midlands, where there is a variety of interactions), is
that the other case study regions appear to have one organisation that dominates SME
collaboration, followed by another two organisations/institutions with whom they interact
significantly. It can be noted that these regions do not have a sufficiently stable skill
ecosystem, and require further horizontal and vertical collaboration, co-operation and policy
dialogue to achieve such an outcome.
Table 5.1. Regional SMEs’ levels of interaction with training organisations
Collaboration/
partnerships
Information, awareness Government policies/
and advice
programmes
SMEs’ internal
proposals
VET/Training
providers
Other
Canterbury
West Midlands
Zaglebie
East Flanders
OSTIM
Quebec
Manitoba
The workshop participants identified a number of suggestions, each referring to the
specific needs of their region, for improving SMEs’ skills and training. These suggestions
mostly relate to: collaboration/partnerships; providing information, awareness and advice;
government policies/programmes; SMEs’ internal proposals; customise VET/training
providers’ programmes; and other more individual suggestions.
●
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Collaboration/partnerships: the Canterbury region recognised the importance of SME and
training provider partnerships; greater involvement of industry with career education in
schools; and implementation of regional facilitation and networks/forums. At one stage,
the New Zealand government had a regional facilitation programme, however, not all the
stakeholders were involved in the forum. Nevertheless, the programme provides a
potential basis for future collaboration/partnerships.
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SKILLS AND TRAINING ECOSYSTEMS
●
Information, awareness and advice: all the workshops identified the importance of raising
awareness of the benefits of skills and training as a long term benefit for SMEs. West
Midlands’ workshop noted the need to measure the impact of training, thereby assisting
in raising skills and training development awareness to SMEs, with the emphasis on
skills utilisation. The workshop also noted the need for new business start-up
information. The United Kingdom has a Business Link programme, which is an online
resource for business portals whereby skills information is provided and then addressed
at local advice centres. However, the workshop highlighted that the advice given was not
always up-to-date with the current economic and training situations within their region.
It should be noted that Business Link was phased out by November 2011.
●
Government policies/programmes: OSTIM highlighted the need for a supervisory body to
provide leadership; recommended that SMEs should co-finance training funding with
public organisations; and suggested lowering the employee number threshold for
compulsory inclusion of a company training department.
●
SMEs’ internal proposals: Canterbury, West Midlands and East Flanders highlighted the
importance of promoting a training culture within SMEs, and thus the need to train
middle management and link training to the broader internal organisational framework.
The industrial zone of OSTIM also noted the need for SME owners to increase delegation
of authority, thereby utilising newly developed skills by employees.
●
VET/training providers: the majority of workshops highlighted the need for training
providers to customise their training programmes to meet the needs of SMEs. Training
should be more responsive, provide short-term courses, and be more informal and
practical. West Midlands suggested that there is an opportunity to blend learning
environments, such as combining face-to-face with computer-mediated instruction.
Conclusions and policy implications
The regional workshops highlighted the individual dynamics of their respective SMEs’
skills and training development environment, focusing on: skills needs; training and
competency building in SMEs; the role of networks; and outcomes of skills and training
development. Importantly, the workshop, combined with the results of the survey, reveals
a portrait of the local/regional context in which the collaboration with skills and training
organisations occurs.
Buchanan (2001) emphasises the importance of high-skill ecosystems as engines of
economic growth and development, and policy developers also need to keep in mind that
these ecosystems are important for the social value of their work as well as potential
generators of employment. Policy is a crucial component in the dynamics that structure the
emergence and character of ecosystems, and vocational education, training policy and skills
formation need to be located within a broader matrix of influences and policy domains.
Therefore, a key challenge for policy makers is how to combine a diverse range of
policy instruments across a wide range of portfolios in order to manage an assorted bundle
of ecosystems. Payne (2008) states that: “… a skill ecosystem approach confronts policymakers who are dealing with education and training issues within a level of complexity to
which they are not normally accustomed. It challenges crude policy assumptions about
any simple or direct relationship between national skills stocks and economic
performance, highlighting instead the complexity of such linkages and emphasising the
essential point that skills can only make a difference if they are put into productive use.”
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Policy response/recommendations:
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●
Policy makers need to be aware of the local/regional SME context and the need for
individually focused skills and training development policy reflective of their area.
●
There is a need for more policy dialogue, not only in relation to SMEs’ skills needs, but
also, in the actual development and implementation of the policy response.
●
Regions with insufficient diversity of interactions require further horizontal and vertical
collaboration, co-operation and policy dialogue with public, private and industry
organisations to achieve sustainable workforce development and skills formation.
●
Incorporation of the value of skill ecosystems to regional/local governance systems as a
tool for better matching of skills supply and demand.
●
The establishment of regionally based networks and partnerships organised around the
principal of workforce development is vitally important for creating a skill ecosystem
environment. Governments play a critical role in acting as a catalyst, providing an appropriate
policy context and support in terms of resources infrastructure and institutional framework
for the establishment and operation of these networks.
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PART II
Key highlights
from case studies
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Skills Development and Training in SMEs
© OECD 2013
PART II
Chapter 6
Training in SMEs
in the Canterbury region,
New Zealand
by
Paul Dalziel
The focus of this chapter is the case study undertaken in the Canterbury region of
New Zealand. Initially looking at the political policy directions put in place by the
government to improve the country’s economic growth, analysis is then undertaken
of the current training participation rates within small and medium sized
enterprises (SMEs) in the region and current issues that may be holding SMEs back
from either undertaking or further developing their training programmes. The
chapter concludes with a discussion of the potential implications for future policy
developments resulting from the research findings.
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Background to the New Zealand case study
New Zealand’s post-war economic development in the twentieth century was largely
based on exportation of agricultural commodities (especially meat from sheep, wool and
dairy products) to the United Kingdom while an extensive system of import licensing was
used to maintain foreign exchange reserves and protect domestic light manufacturing.
This was no longer sustainable after the United Kingdom entered the European Economic
Community in 1973, despite initial efforts to protect producers through the introduction of
greater government controls. The need to modify this approach was recognised after a
change in government in July 1984.
Reforms introduced over the following decade reduced the role of the public sector in
the economy and opened up domestic markets to greater local and international
competition. Government policy since then has aimed at promoting economic
development through market-oriented innovation and a more productive labour force.
The goals of lifting productivity growth and education standards are established
priorities in public policy (Barker, 2007). Key elements include:
●
The New Zealand Treasury has a substantial work programme on productivity growth,
beginning with its influential report, Putting Productivity First, published in April 2008.
That report identified five key drivers of productivity growth: enterprise; innovation;
skills; investment; and natural resources. This framework has been accepted by other
lead organisations.
●
Business New Zealand then used this to create a 50 point productivity action plan in
their publication Setting New Zealand Apart – Getting More Productive and Competitive – A
Plan for Action.
●
The government’s draft Tertiary Education Strategy 2010-15, released in October 2009,
targeted four of its six priorities at increasing the number of people achieving higher
level qualifications as well as assisting adult learners to gain literacy, language and
numeracy skills that in turn lead to higher level studies or skilled employment.
A key element in recent policy initiatives aims to increase skills levels in the existing
labour force, on the basis that 80% of those currently employed will still be in the workforce
in 2020 (New Zealand government, 2008). Effective policies to support training and skills
development in the workforce must take into account that New Zealand businesses are
predominantly small and medium-sized enterprises, or SMEs (Long et al., 2000;
Coetzer, 2002; Vaughan, 2002; Fraser, 2005; TEC, 2005; Coetzer, 2007; Coetzer et al., 2007;
Massey and Ingley, 2007).
Two-thirds of New Zealand enterprises have zero employees, and almost two-thirds of
businesses that do employ staff have no more than five employees (MED, 2009). This feature
of the New Zealand economy, which is shared by other economies, is significant because
there is considerable evidence that small and medium-sized enterprises generally face
significant barriers to engagement with formal training programmes (see Coetzer, 2002).
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The TSME project in New Zealand has involved gathering and analysing new data on
SMEs’ labour force participation in formal and informal training, analysing the impact of
training and skills development activities in firms, and examining local approaches to
learn how incentives can be provided to employers and employees for training activities
that generate results for all employees (OECD, 2008).
Training results in SMEs
The results from the web-based survey reveal that the level of staff training is an issue
for Canterbury SMEs. Evidence for this observation includes:
●
50% of the respondents reported they had “desired training not carried out” in the
previous twelve months.
●
50% of the respondents identified that their business needed training in at least five
different areas (out of seven).
●
53% of the respondents reported that they have no formal training plan.
●
63% of the respondents reported an annual training budget, but only 24% said this was
greater than NZD 5 000.
●
68% of the respondents reported that their firm has no apprentices or trainees.
●
69% of the respondents reported “some need” for management training, and 19%
reported, “high need” for entrepreneurial training.
The survey suggested that two or three areas dominate formal training and informal
capability building. With respect to formal training, 72.2% of the respondents reported
their staff were involved in job-specific technical training, and 66.7% reported involvement
in business planning. These two areas were also among the top three for informal
capability building activities (61.1% and 69.4% respectively).
The importance of informal knowledge intensive service activities (KISA) training
Respondents to the survey reported that informal training is important for their
businesses. Thirty-nine per cent stated that all of their staff are involved in informal
training, and just over one-half stated that 80% or more of staff were involved. Only 7%
reported that less than one-fifth of their workforce participated in informal training.
Furthermore, there was some evidence that firms had put more emphasis on informal
training as a response to the recession that had emerged in the previous twelve months.
Generally, this recorded an increase in training over that period, but it also recorded
that 22 firms had increased their emphasis on informal learning instead of formal learning
(compared to 1 firm that had reduced this emphasis).
The most important sources of informal training were clients and co-workers,
followed by informal networks, suppliers and industry associations. The informal training
was reported as leading to improved skills and other employee benefits. The companies
emphasised improved management and technical skills for medium- to high-skilled staff,
and improved routine skills for low-skilled staff. Both groups of staff benefited from
improved social skills as a result of informal training. Other employee benefits were
reported as being largely captured by the medium- to high-skilled staff, with half the firms
saying that this group advanced their careers through informal training.
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There are some interesting differences in the motivations for participation in informal
training compared to formal training. In both cases, raising employee skills was cited as
one of the top two reasons, but industry association was offered as the first motivating
factor for formal training in contrast to its thirteenth position on the list for informal
training. This is likely to reflect the key and appreciated role of industry training
organisations (ITOs) in managing formal training. Similarly, training regulations featured
prominently among the motivations for formal training, but not at all in informal training.
Again, this is likely to reflect the role of ITOs, but is also likely to reflect the role of formal
health and safety regulations in some industries or occupations.
There were considerably more responses explaining motivations for participation in
informal training than for formal training, and the top four categories were all business
related: service needs; employee skills; new product; and production needs. Each of these
categories was indicated by more than half of the survey’s respondents. This suggests that
informal training is more directed towards the company’s business needs, rather than
being framed by industry or regulatory requirements.
More firms reported participation in formal training for job-specific technical skills (52
firms) than in informal training (44 firms). There were six categories where a noticeably
larger number of firms reported participation in informal training than participation in
formal training: marketing and promotion; research and development, legal advice;
e-commerce; language coaching; and entrepreneurship. The gap between the two training
types in relation to the last category was particularly large. Only 12 firms reported that
their staff had engaged in formal training activities for entrepreneurship, but 39 firms
reported engagement in informal training activities.
Specific issues for Canterbury
The research identified some other issues related to the main themes discussed in the
three sections above. These are recorded in this final section for further consideration.
Participants in the survey were much clearer about company benefits than industry or
regional benefits for both formal and informal training. It is not possible without further
research to determine whether this indicates that skills development genuinely has little
benefit at an industry or regional level, or whether this indicates that firms focus their
attention only on the benefits to their own business (and so they are unable to comment
on any wider benefits). The feedback from the case studies is that the five firms were
willing to invest in skills training (formally or informally learned) that directly benefited
their business.
Related to this question is the observation that in the survey sample, the highly
innovative firms were more likely to be ten years or older, and to have 10-19 employees. It
must be emphasised that this was a small sample in a single region of New Zealand,
nevertheless, these data suggest a hypothesis, which is that: in order to grow successfully
through this range, small firms have to introduce at least one radical innovation or a range
of incremental innovations across a number of their business and production systems.
There was evidence in support of this hypothesis in the case studies.
If this hypothesis is indeed valid, then the growing small firm may find it has some
important skills gaps that need to be filled urgently. This might be done by recruitment, by
releasing a staff member for formal education, or by engaging in informal training inhouse or externally. In all cases, the motivation is provided by the pressing business need,
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and it is not difficult to imagine that training in creating or using knowledge intensive
service activities could be a priority for such a growing enterprise. It would be valuable for
more research to be undertaken in New Zealand on this issue.
More generally, the research suggests that firms can adopt distinct strategies for
expanding and maintaining their skills capabilities. Some firms appear to focus on recruiting
the right skills (including – and perhaps especially – the “soft skills” such as ability to work in
teams), while others appear to focus on training to achieve these. For some companies, the
fostering of a learning culture within the workplace, supported by strategic opportunities for
formal education or informal training, is regarded as an explicit source of competitive
advantage. It can be a way of reducing staff turnover and of building a team of employees
who are capable of exercising initiative and solving business-related problems. For a small
firm, close contact with the firm’s skilled and experienced founder can be an important
attraction for employees wanting to develop their own skills and experience.
The training ecosystem workshop included a debate about the number of
qualifications on New Zealand’s Register of Quality Assured Qualifications. Different points
of view were expressed about the balance between “diverse provision” and “fragmented
policies”. This issue is the subject of current policy review in New Zealand, and so has not
been considered further in this report.
Finally, a research issue being explored in the wider OECD research programme
concerns the impact of environmental issues on the business practices of SMEs. Questions
related to this issue were added to the survey after the first set of participation invitations
was sent to New Zealand firms. This means there is no quantitative data on this issue, but
the five case studies suggested that environmental concerns are recognised by firms as
part of acknowledged good practice, but without any sense that environment-based
regulations are having a major impact on their operations. It is, however, not possible to
put too much weight on this result, given the very small number of firms interviewed.
Implications for policy development
The findings in this report suggest some possible implications for further policy
development in New Zealand.
Entrepreneurial skills
The Tertiary Education Commission could be encouraged to review current training
that focuses on skills related to entrepreneurship, to investigate whether the mismatch
between a reported high need for training in entrepreneurial skills and a low level of formal
training in this area (compared to informal training) is due to a shortage in supply or
mismatch in the nature of demand and supply.
Knowledge intensive service activities
The government could consider refining and better linking training assistance to SMEs
through programmes administered by New Zealand Trade and Enterprise, the Department
of Labour, and the Tertiary Education Commission, with the following objectives:
●
Facilitating a more closely connected assistance package, aimed at reducing companies’
search and decision costs when trying to meet staff training and development needs.
●
Facilitating access to a flexible suite of training alternatives that meet companies’ needs
– not limited to full qualification-bearing courses.
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●
Encouraging firms to understand the value of “learning while doing” to improve both
employee and company capabilities. Also, building this more deliberately into their
business plans as well as their purchasing and training decisions, in the interests of
boosting companies’ capability and productivity levels.
Barriers and incentives to training
The Tertiary Education Commission could continue to work on ways to reduce the
extent to which costs and time availability are barriers to formal training of medium to
high-skilled staff in SMEs.
In addition, the findings have raised questions for further research, including:
●
Young people and informal training: research could be undertaken into the extent to
which young people in the workplace participate in informal training activities; whether
or not there are any patterns relating to levels of pre-existing skills or qualifications; and
the nature of enterprise-level factors influencing any differences between their levels of
participation and those in other age cohorts.
●
Innovation and training: research into the nature of the relationship between preexisting levels of innovation in a firm, and levels of investment in both formal and
informal training. A particular focus of this research could examine the links between
innovation and training for small firms in New Zealand, which are growing through the
range from 10 to 20 employees.
The national skills training ecosystem
An important part of this project was the workshop on the regional skills training
ecosystem in Canterbury. Further research could be done to explore the nature of New
Zealand’s national skills training ecosystem and if there are opportunities for policy
frameworks in secondary education, tertiary education, industry training and life-long
learning to be better integrated in order to strengthen interaction between employers,
employees, students and education or training providers.
References
Barker, P. (2007), “Skills Strategies for Competitiveness: The New Zealand Experience”, paper presented
to the Conference on “Designing Effective Employment Strategies through Local Economic
Development in China: Policy and Governance Issues”, Beijing, 26 April.
Coetzer, A. (2002), “Employee Learning and Development in the Small Business”, New Zealand Journal of
Applied Business Research, Volume 1(1), pp. 1-11.
Coetzer, A. (2007), “Employee Perceptions of their Workplaces as Learning Environments”, Journal of
Workplace Learning, Volume 19(7), pp. 417-434.
Coetzer, A., L. Lee, K. Lewis, C. Massey and M. Perry (2007), Learning to Thrive or Learning to Survive? A
Report on NZ SMEs and Workplace Learning, New Zealand Centre for Small and Medium Enterprise
Research, Massey University, Palmerston North.
Dalziel, P. (2010), “Leveraging Training: Skills Development in SMEs. The Canterbury region in New
Zealand”, LEED Working Paper Series, 2010/2, OECD Publishing, Paris, http://dx.doi.org/10.1787/
20794797.
Fraser, T. (2005), Small Businesses and Industry Training: Individualised Approaches that Work, Industry
Training Federation, Wellington.
Long, M., R. Ryan, G. Burke and S. Hopkins (2000), Enterprise-based Education and Training: A Literature
Review, Ministry of Education, Wellington.
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Massey, C. and C. Ingley (2007), The New Zealand Policy Environment for the Development of SMEs, New
Zealand Centre for Small and Medium Enterprise Research, Massey University, Palmerston North.
MED (2009), SMEs in New Zealand: Structure and Dynamics 2009, Ministry of Economic Development,
Wellington.
New Zealand Government (2008), New Zealand Skills Strategy 2008, discussion paper published by a
tripartite committee serviced by the Department of Labour, Wellington.
OECD (2008), Leveraging Skills and Training in SMEs, CFE/LEED (2008)6, OECD, Paris.
TEC (2005), The Challenge of Engagement: Involving Small and Medium Sized Enterprises in Industry Training,
Tertiary Education Commission, Wellington.
Vaughan, K. (2002), Turning Barriers into Opportunities: A Literature Review on Small to Medium-Sized
Enterprise (SME) Engagement with Formal Training, New Zealand Council for Educational Research,
Wellington.
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Skills Development and Training in SMEs
© OECD 2013
PART II
Chapter 7
Training in SMEs
in the West Midlands region,
the United Kingdom
by
Anne Green and Laura Martinez-Solano
This chapter provides a detailed look at the research undertaken in the West
Midlands region of England. Following an introduction that includes a summary
outline of current training-related policy direction in the United Kingdom, there is a
discussion of the results obtained from the TSME survey, with a particular focus on
barriers to training, and areas in which companies feel they need to most focus their
training efforts. Investigation of small and medium sized enterprises’ (SMEs)
participation in knowledge intensive service activities (KISA) and other informal
training activities is next, as well as a study of the primary sources of informal
training for SMEs. Finally, implications for policy development are outlined,
including: the importance of contextualising training; encouraging companies to
seek growth via training; utilise alternative frameworks to build and strengthen
capacity and capabilities; and the SMEs’ discussion of their need for governmentbased funding to support training activities.
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Background to the United Kingdom case study
The United Kingdom research focused on the West Midlands region of England. As
context for the research, a review of trends and challenges in training and skills
development in the United Kingdom was undertaken, along with analyses of data relating
to small and medium sized enterprises (SMEs) from a major employer survey conducted in
England. The results of these contextual analyses are presented, along with the findings
from a bespoke OECD survey of SMEs in the West Midlands, case studies of five SMEs and
a workshop on the local training ecosystem.
Traditionally, policy centred on skills development in the United Kingdom has
emphasised the need to improve the supply of skills, but more recently, the focus has
shifted to raising the demand for skills. As a result, increased emphasis has been placed on
enhancing the utilisation of skills, up-skilling and encouraging movement up the value
chain. Previous research indicates that within the SME population there is considerable
variety of experience regarding investment in training and skills development.
Following a long period of economic growth and a deep recession, the United Kingdom
needs “… to build a system to match the high-skill, people-driven economy of the future –
a system that responds well to business need while opening opportunity for all people”
(United Kingdom Commission for Employment and Skills, 2010: 6).
Employment and productivity are seen as being central to the United Kingdom’s future
prosperity, and well-developed skills are crucial to both. Hence, the underpinning rationale
for skills-related policies in the United Kingdom has been to raise skills levels as a means
of achieving higher levels of employment, productivity and prosperity. Although
enhancing skills in order to transform the United Kingdom into a high-skill economy has
held a central place in government policy, despite significant improvements in the United
Kingdom’s skills profile, the challenge still remains significant.
While the United Kingdom has an ambition to achieve a “top eight” position by 2020 in
international skills rankings (as measured by qualifications), in 2010 it was ranked
seventeenth on low level skills, eighteenth on intermediate level skills and twelfth on high
level skills. Training is unevenly distributed, with those with low-skills, managers and
employees in small firms receiving less training than the average (United Kingdom
Commission for Employment and Skills, 2010).
Skills focused policy in the United Kingdom is devolved, and there are variations in
aspects of the focus, priorities and delivery mechanisms across the United Kingdom.1
However, the overarching aims of skills based policies are broadly similar across the four
nations of the United Kingdom. These are: to build a more internationally competitive
skills base, with a workforce equipped to compete in the labour market and drive
sustainable economic growth. Moreover, the acquisition of skills is seen as a pivotal means
of improving social inclusion and social mobility.
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Until recently, a primary focus of skills related policy has been on initial skills
acquisition, rather than on the demand for, and utilisation of, those skills. As noted in an
earlier section, this emphasis is now changing. This has involved placing greater emphasis
on understanding the means by which to encourage more businesses to secure and utilise
higher skills as part of their business improvement, as well as encouraging ongoing skills
development and upgrading in the workplace. A new Skills Strategy published in
November 2010 has placed particular emphasis on management and leadership, growth
and innovation, with a strong focus on SMEs (Department for Business, Innovation and
Skills, 2010).
The West Midlands region in central England has been harder hit in the 2008/9
recession than most other parts of the United Kingdom. Large employers are the most
likely to report reductions in staffing levels during recession, with the manufacturing and
construction sectors being particularly affected. The regional development agency for the
West Midlands identified the region’s relatively poor skills record, alongside low rates of
innovation, as factors underlying the region’s weak performance.
Training results in SMEs
There were 50 respondents to the Leveraging Training and Skills Development in SMEs
(TSME) survey, who answered most of the questions included in the survey. If the number
of respondents changed in any question, this is indicated within the following sections. All
of the participating small and medium enterprises (SMEs) consider themselves Britishowned. Most of the SMEs have less than 50 employees (92%); of which 44% are microenterprises with less than 10 workers and 47% are small firms with 10 to 49 employees.
Interestingly, the majority of these companies (66%) have existed for more than nine years
in their market. All the firms with more than 50 members (8%) have been in the market for
more than 10 years. However, 20% were recently created (less than five years old).
The majority of respondents indicated that the main barriers to training high/mediumskilled employees were finance related, such as “high costs/too expensive” (81%), and “lack
of public money” (57%). A smaller percentage also chose “impossible to interrupt production/
no time” (43%) (this is strongly linked to the first two in its relationship to lack of resources)
and, to a lesser extent, “too difficult to access training” (33%), and “too difficult to identify
suitable provider” (24%).
The main barriers to training low-skilled workers for almost a quarter of these firms
(24%) were “high cost/too expensive” and for (19%) “lack of public money”, “impossible to
interrupt production/no time” and/or “too difficult to access training”.
A larger number of firms indicated that in-house incentives rather than other private
or public incentives are the main reasons for their business to undertake training: “need to
increase employees’ skills level” (34%); “service requirements” (30%); “production needs”
(28%) and “new product/service development” (24%). Of the public incentives identified in
the survey, only one, “country regulations” is considered significant for some (28%) firms.
Fifty-two per cent of companies indicated that they need some training in “generic
skills: general IT user skills; oral communication; written communication; numerical and
literacy skills; and office administration skills”. Meanwhile, 50% also pointed out some
need for “management skills” and (44%) “technical/advanced skills: required for problem
solving; design, operation, rethinking and maintenance of machinery or technological
structures; IT professional skills”. An area of skills development identified as particularly
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“high need” was “management skills”, with 18% of respondents selecting this option. The
other options were chosen by a smaller number of companies.
The importance of informal (KISA) development
Only a small number of respondents considered that some of the 15 listed activities in the
questionnaire were conducted regularly by their organisations and have “significantly
increased” the skills, competencies or knowledge of their employees in the previous 12 months
(early 2009-early 2010). For instance, activities such as “research” (28% of the 50 SMEs), “jobspecific technical activities” (28%), “business planning” (26%), “marketing and promotion
services” (22%) and “information and technology services” (20%). The rest of the options were
chosen by a lower number of participants.
A larger number (but still no more than one-third) of companies said that they had
“significantly increased” their skills, competencies or knowledge by conducting “one-off”
activities related to areas such as “organisational health and safety advice” (33%), “information
and technology services” (32%), “business planning” (28%), “research” (26%) and “job-specific
technical activities” (24%).
However, the majority indicated that they did not conduct some of the 15 presented
activities, such as “language or communication coaching” (80%), “legal advice and services”
(72%), “social skills development” (72%), “green skills development” (70%), “entrepreneurship
related activities” (62%), “e-commerce” (62%), “accounting and finance services” (60%), “human
resources services” (60%) and “marketing and promotion services” (52%). The remainder of the
15 nominated activities were also selected as coming under this category by more than two
fifths but less than half of the firms.
For high/medium-skilled employees, more than two-fifths of 40 SME respondents
indicated that the following activities are better sources of learning than formal training:
“business planning” (57%), “research” (52%), “marketing and promotion services” (47%),
“accounting and finance services” (45%), “information and technology services” (45%),
“e-commerce” (45%) and “entrepreneurship related activities” (43%). For low-skilled workers,
a much lower number of the firms thought that the following activities are better sources of
learning than training: “job specific technical activities” (37%); “social skills development”
(35%); “organisational health and safety advice” (30%); “green skills development” (20%);
“information and technology” (20%), and the list continues in decreasing order.
Implications for policy development
The findings of the research project support the view that context plays an influential
role on the amount and nature of training and skills development that is undertaken and
desired. Overwhelmingly, a recurring theme from SMEs was that training needed to be
tailored to their context and responsive to their company requirements. The product/
service market position, or the niche that a company occupies within the economy, and the
market/s within which the company competes (or which they are looking to enter) are
pivotal to determining skills needs.
This underlines the importance of raising employer ambition to seek growth via a route
involving high-skill levels, innovation and quality. Professional and quality standards
provide one means of “kite marking” quality.2 Procurement is another route that has been
used to foster skills development – through introduction of clauses related to training (for
local people), provision of apprenticeships, etc. Although some workshop attendees referred
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to the historical role of levies, statutory training levies have not been – and are unlikely to be
– a prevalent feature in the United Kingdom (outside the construction sector).
This research project has demonstrated that there is an appetite for new frameworks
and systems to promote business development through building and enhancing capacity and
capability,3 which encompasses training and skills development. But the main issue, which is
how this will be achieved, is somewhat less clear. Some SMEs could benefit through
participation in employer networks, where they might be able to achieve economies of scale
by coming together to develop and fund training that they might otherwise be unable to
afford. Such networks might also play a role in sharing good practices. The findings of the
research project suggest that sector-based networks might be particularly attractive,
although some SMEs would need to overcome fears of “poaching”. Professional associations
and charitable organisations may have a particularly valuable role to play in providing
information, advice and guidance, in brokering training and skills development that is
responsive to the needs of SMEs, and in helping foster a culture of high performance work.
Likewise, Sector Skills Councils and the new Local Enterprise Partnerships (being established
at the time of writing) may also have a contribution to make here.
The thrust of United Kingdom policy is market-based. There is a clear emphasis on
voluntarism. Although enterprise, and SMEs in particular, are high on the Coalition
Government’s agenda, publicly funded support for training is limited – particularly at a
time of austerity.
However, for the most part, the emphasis of the new government’s policy is not on
“entitlements” to government support, but rather rests on the principle that since
employers and workers benefit from training and skills development, they should bear the
cost – albeit with some up-front support through loans for some companies. This is
counter to the views expressed by some interviewees and workshop attendees, which is
that there is need for much more support through public funding. Rebalancing national,
regional and local economies – sector-based and spatially – is emerging as a dominant
economic theme in the United Kingdom, but this is intended to be achieved largely through
creating an environment conducive to enterprise – particularly for SMEs – in which
employers and workers invest in their own skills development.
Notes
1. The United Kingdom is made up of four nations: England, Wales, Scotland and Northern Ireland.
England is easily the largest of the four nations and since the case study area – the West Midlands –
is in England, the material presented relating to the West Midlands refers to the English context.
2. The Skills White Paper published in November 2010 sets out plans to initiate a demand-led growth
and innovation fund of up to GBP 50 million of government investment per year to support
employment initiatives within sectors, such as new professional standards, and to promote
leadership and management in SMEs.
3. The terms “capacity” and “capability” are used here to highlight the fact that while training and
skills are important, business development is about more than increasing training and skills;
applying and utilising those skills to move up the value chain is also important.
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References
Department for Business, Innovation and Skills (2010), Skills for Sustainable Growth, Department for
Business, Innovation and Skills, London.
Green, A. and L. Martinez-Solano (2011), “Leveraging Training: Skills Development in SMEs an analysis
of the West Midlands region, United Kingdom”, LEED Working Paper Series, 2010/2, OECD Publishing,
Paris, http://dx.doi.org/10.1787/20794797.
United Kingdom Commission for Employment and Skills (2010) Ambition 2020: World Class Skills and
Jobs for the UK , United Kingdom Commission for Employment and Skills, Wath-upon-Dearne and
London.
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Skills Development and Training in SMEs
© OECD 2013
PART II
Chapter 8
Training in SMEs
in the East Flanders region,
Belgium
by
Ans De Vos and Ine Willemse
This chapter begins by providing a snapshot of the current position and place of
small and medium sized enterprises (SMEs) within Belgium’s workforce.
Investigation of the difficulties surrounding encouragement and pursuit of training
activities follows, which highlights areas such as cost, lack of specialist training
suppliers, and absence of formal training plans and associated budgets. Recognition
of the importance of knowledge intensive service activities is noted, but the
difficulties inherent in measuring these activities are also acknowledged. The
chapter concludes with recommendations regarding policy implications for policy
developers, including the need to: recognise the high percentage of SMEs in Belgium;
affirm the strategic importance of improving employee’s skills; contribute, even in
small ways, to a green economy; and to undertake more networking between
companies and training institutions.
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Background to the Belgian case study
For the study in Flanders, the province of East-Flanders was chosen as a case study
region on account of its high amount of SMEs, which have a wide diversity of activities and
sectors, and due to the existence of knowledge clusters (e.g. Flanders Biotech Valley).
In Belgium, firms employing less than 50 employees are considered to be an SME.
Taking this definition into account, the total number of SMEs in the Flemish region rises up
to 513 829 which, in relative numbers, equals 99.4% of organisations. Given the high
presence of SMEs in Belgium, it is obvious that SMEs play a substantial role in the Belgian
economy. Currently, SMEs contribute to more than 50% of Belgian’s prosperity and their
contribution to the country’s total economic activity and employment keeps rising year
after year (Tijd Rapport KMO, 2010).
In Belgian SMEs, in 2008, less than one out of ten employees had participated in formal
education (Nationale Bank van België, 2010). For medium-sized organisations (employing
50 to 250 employees) this number increases to one out of three, while for large
organisations (employing more than 250 employees), more than half of the employees have
followed a formal educational course.
These results are not surprising, since small organisations are less able to replace
employees when they are away for training. As it is more difficult for SMEs to
counterbalance the drop in production that results when an employee is away for formal
training, it is challenging for them to let their employees participate in such training
activities. Furthermore, the financial barrier for investment in formal training is relatively
higher for small as compared to large organisations (Nationale Bank van België, 2010).
Therefore, according to several Canadian studies, SMEs would prefer informal training
courses for their employees, since the costs for informal training are lower than those for
formal training. However, this does not seem to be the case for Belgian SMEs, with 8.3% of
employees participating in formal education and only 4.3% participating in informal
education. When considering the total amount of hours that employees devote to their
personal development, it was found that 60% of these hours are spent in formal education,
while informal education represents approximately 27% (Nationale Bank van België, 2010).
When looking at the probability of an organisation performing educational activities,
the size of the organisations appears to be the most important determining factor. While
nine out of ten large organisations support educational activities, this number drops down
to one out of ten for small enterprises (Nationale Bank van België, 2010). Other factors that
determine whether or not an organisation performs educational activities are: the sector to
which the organisation belongs; the number of higher educated employees; and the
number of permanent staff.
For the Flemish government, lifelong learning and employee development stand high
on the priority list. The acknowledgement and development of competencies is stressed as
being a crucial instrument in clearing the way for sustainable and innovative economic
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growth and for promoting the employability of individuals. In their 2009 policy statement,
the government explicitly acknowledges the strong need to stimulate investments in
training and development. Furthermore, the government realises that, especially in small
enterprises, investments in employee development are rather low.
To facilitate employee training and development in SMEs, several tools and financial
measures have been put in place. One of these measures is the so-called SME-portfolio.
Annually, an SME can obtain reimbursement of up to 50% of the investments made in the
area of training and costs pertaining to entrepreneurial advice, or advice concerning
innovations and internationalisation. The aim of this measure is to decrease the existing
financial barrier stopping SMEs from investing in the development of their employees.
The survey results for East-Flanders confirm figures regarding training in SMEs to be
found in other databases. The opinion of the SMEs’ owner about the importance of training
for business success is a critical factor in how relevant and important training and skills
development is perceived to be within an SME. The study also demonstrates that SMEs
in East-Flanders know about many spontaneous, informal but well-targeted initiatives.
There are signs of “eco-systems”, initiated by the entrepreneurs themselves, but not in
a systematic way. This indicates the often hidden potential that already exists at the level
of SMEs.
This study uncovers challenges at two levels. A first and necessary step for further
coaching and support in organising training and development in SMEs is by increasing
awareness of the importance of training and development for business success among
SMEs that are currently not scoring highly on this topic. Secondly, SMEs already concerned
with training and development must be further supported and encouraged.
Training results in SMEs
In general, one can state that small and medium-sized enterprises are aware of the
merits of training and skills development. Clear benefits are recognised for the firm, such
as improvement of skills and education level. Companies are often not aware of the impact
of their efforts in skills development on the industry and the region. The extent to which
SMEs are active in terms of training, largely depends on the business manager. If employee
development is embedded in the company spirit, generally all employees participate in
training activities.
The results from the survey nonetheless reveal that workforce development
encounters difficulties in some SMEs in East-Flanders. Evidence for this observation
includes:
●
39% of the respondents reported they had “desired training not carried out” in the
previous year.
●
57% of the respondents reported that they have no formal training plan.
●
32% of the participants include an annual training budget.
●
79% of the SMEs do not have apprentices or trainees.
Note that these results may underestimate the training issues, since managers with a
greater interest in training are more likely to respond to a survey of this type. Remarkably,
the results showed no major reductions on training in SMEs due to the financial crisis.
SMEs sometimes refrained from training because of the difficulty of interrupting
production and the high costs. Additionally, although there is a broad offering of training
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in East-Flanders, companies – and especially small ones – struggle to find the specific
training for which they are looking. This is caused by a lack of structure in the overall
training offered. Companies have no clear view on what the different training possibilities
are in the region.
Only 3% of responding SMEs stated climate change regulations drove company
innovation. However, one fifth of the sample (21%) recognised some need or a high need for
additional training in the coming year concerning green-specific skills. As such, although
the awareness of firms regarding green skills and training needs appears to be limited,
some need of skills upgrading is foreseen. The consciousness of the importance of a green
economy is growing, but there are presently a limited number of actions being undertaken
on this topic.
The results of the workshop show that we cannot speak of a single skills and training
ecosystem in East-Flanders. Managers of SMEs make an effort to participate in different
networks, but there are still opportunities for more. Furthermore, the current networks are
scattered across the region and the different industries, and there is limited networking
regarding the levels of training. Small companies are really searching for likeminded firms
with which to exchange knowledge and from whom to learn.
The importance of informal (KISA) training
When questioned about informal knowledge intensive service activities’ (KISA)
training, respondents reported that clients, co-workers and suppliers were the most
important sources of informal training. SMEs make abundant use of knowledge intensive
service activities, such as mentorships and godfather projects. Companies believe that
these activities lead to improved skills and other employee benefits. Unfortunately, it is
both difficult for researchers to enquire about the use of informal learning, and hard for
employers to be aware of the practices, because informal training always remains
immeasurable.
Analysing the data obtained from the survey information, one can say that informal
training is really important in small and medium-sized companies. Informal learning is the
best way to educate all groups of workers, but is of especial use to the low-skilled workers.
SMEs make good use of KISA such as mentorships and godfather projects, which are
extremely popular among SMEs.
Specific issues for East Flanders
Analysing the survey results, the case studies and the results from the workshop, one
can say that climate change adaptations and regulations have a limited impact on the
businesses. The consciousness about the importance of a green economy is growing, but
until now, there have been limited actions on this topic. In general, there are incremental
changes, but not yet radical changes towards greening the economy. Attention
nevertheless grows with the subsidies from the government and the increasing media
attention.
Implications for policy development
Based on the research results, the following main recommendations can be made:
●
134
The Flemish government should continue to recognise that businesses in East-Flanders
are predominantly SMEs and that these companies face particular challenges when
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II.8.
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accessing training for their employees. Therefore, there is a need for a clear overview of
the training activities in the different regions.
●
There must be more communication about the added value and importance of training
in companies. The Flemish government should continue to affirm the strategic
importance of developing the labour force’s skills as a contribution to its commitment to
lift the region’s productivity and growth.
●
Companies must continue to attach importance to informal learning, and handle the
topic more consciously. Training providers as well as authorities should pay more
explicit attention to informal learning and further stimulate its use. Informal learning is
as important as formal learning. Particularly for SMEs, informal learning is a time and
cost effective way to develop their workforce’s skills.
●
Even more communication about the necessity of green skills is required. Companies
need to understand that this can start with small things, such as separating waste and
carpooling with colleagues to work. For SMEs, it is important to know that contributing
to a green economy does not need to involve enormous investments, but can be achieved
through daily practices.
●
There is a need for more networking between companies and training organisations. For
example, more platforms can be installed to bring companies together. SMEs should also
be able to direct specific questions to the academic world. Academic institutes could be
more closely connected with the practical reality of companies and their issues.
References
De Vos, A. and I. Willemse (2010), “Leveraging Training and Skill Development in SMEs: An analysis of
East Flanders”: LEED Working Paper Series 2010/2, OECD Publishing, Paris, http://dx.doi.org/10.1787/
20794797.
Nationale Bank van België (2010), Economische en financiële, Nationale Bank van België, Belgium.
Tijd Rapport KMO (2010), Woensdag 10 November 2010, VBC Group, Belgium.
SKILLS DEVELOPMENT AND TRAINING IN SMES © OECD 2013
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© OECD 2013
PART II
Chapter 9
Training in SMEs
in the Zaglebie sub-region,
Poland
by
Michal Kubisz
This chapter begins with the provision of a background portrait of the Zaglebie subregion of Poland, outlining why this area was chosen for study. Difficulties
encountered by small and medium sized enterprises (SMEs) when attempting to
provide or undertake training are then discussed, including the high costs
associated with training, a lack of comprehension regarding the benefits of
undertaking training, and an inability to properly assess workers’ training needs.
The informal learning sector was then investigated, with results showing very low
levels of recognition of the importance of and benefits to be realised by
communication and interaction with external institutions. Internal training via
informal channels is then noted as being a recurring practice among the more
successful medium-sized companies, highlighting the usefulness of encouraging
regular internal communication and a flexible organisational structure. The chapter
concludes with a look at policy development implications arising from the research,
particularly noting the importance of government focus on encouraging intercommunication and informal training networks within and among SMEs.
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Background to the Polish case study
The OECD project on leveraging training and skills development activities for Poland
was focused on the region of the “Zaglebie Dabrowskie” – a part (sub-region) of the Silesian
voivodship of Poland.
SMEs in Poland often lack the resources or willingness to invest in new technology.
Innovation expenditures, especially on research and development, are low. SMEs are
disadvantaged in terms of capital relative to European Union (EU) counterparts and are
more likely to report difficulties due to: lack of skilled labour; a bureaucratic regulatory and
procedural environment; poor infrastructure; and high labour costs.
The area was selected amongst other NUTS III* areas of Poland for the following three
reasons:
●
It consists of two distinct economic zones and this division can be seen as representative
in terms of the patterns prevailing across Poland: western Poland is highly urbanised and
industrialised (with the main cities belonging to the large, densely populated
conurbation known as the Upper Silesian Industrial Area); whereas eastern Poland is
predominately rural and underdeveloped.
●
The Zaglebie Dabrowskie sub-region is an area of industrial restructuring. The main part
of the region belongs to the Upper Silesian Industrial Area, which traditionally has been
dominated by heavy industries (coal mining and steel production), but which has been
undergoing restructuring since the early 1990s.
●
The figures for the voivodship of Silesia, compared to the levels of absorption of the
European Social Funds (ESF) that are devoted to SME training, represent levels close to
the national average (the figures related to the programming period of 2004-06 have been
taken into account). This suggests that the region is a good representation of the entire
country in terms of skills development and training policies of SMEs.
Training results for SMEs
Survey evidence indicates that lack of critical mass is often reflected in a lack of
operational sophistication and too little attention to strategy development, record-keeping,
marketing and innovation. A majority of SMEs have problems with management quality
and two-thirds are focused on survival and maintaining their current position, rather than
on development or growth.
In relation to participation in training, 30% of the enterprises did not participate in any
type of training during the last 12 months. 41.7% of companies that did participate in any
training took part in vocational training (specific occupational training). This could be
* Nomenclature of Units for Territorial Statistics, Eurostat, http://epp.eurostat.ec.europa.eu/portal/page/
portal/nuts_nomenclature/introduction.
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linked with the specific characteristics of the regional economy, which is dominated by the
production sector (mechanic and electro-mechanic production).
The companies involved in innovation tend to participate in vocational training more
often, and medium sized enterprises participate in training much more often than smaller
companies. Participation rates in courses related to management, accounting, finance, and
information technology were very low.
The needs in the area of entrepreneurship and social skills are relatively high.
However, companies participate in courses developing these skills very rarely. Perceptions
of the outcomes of training are also rather negative. Most of the enterprises when asked
about the barriers to training indicated the difficulties in assessing workers’ needs as a
major problem.
The expensive costs also ranked very highly (chiefly for high-skilled employees),
which was a surprising result considering the large amounts of public funds that were
made available under the EU-programmes to reduce the costs of training.
Training companies were listed as being the most important players in the local
learning ecosystem. Business organisations, non-government organisations and
institutions of higher education were listed as the least important, also in the case of
informal learning.
The importance of informal knowledge intensive service activities (KISA) training
The lack of appreciation regarding the learning value of communication and
interaction with external institutions (other companies, competitors, local development
agencies, government institutions, etc.), or within the companies, is widespread. Fifty-nine
per cent of enterprises did not indicate that they saw any of the interactions listed in the
questionnaire as being important for learning. This may indicate the existence of a wider
problem with communication and co-operation and may suggest that the level of social
capital (ability to co-operate, trust, communicate and learn) in the Zaglebie region is rather
low and may impede its economic development.
However, the learning value of interactions with other companies (customers, clients
and even competitors) was validated as being the most beneficial amongst all other types
of interactions. The least appreciated interactions appeared to be in relation to business
organisations and associations, educational institutions and development agencies.
Learning – both based on formal training and informal interactions was motivated by
internal business needs (new products or services).
The interviews conducted with the successful medium-sized companies show that the
informal learning facilitated by appropriate management systems can be very important for
companies. As stated before, regular internal communication (based on stable procedures)
by the company managers is a key factor underlying the success of these companies. The
case studies also show that a flexible organisational structure under which workers may
openly communicate and collaborate on a project (tasks) basis rather than on a closed unit
basis is very important for the companies’ effectiveness in the market.
Implications for policy development
The ESF measures for promoting training in SMEs could play an important role in
improving SMEs’ access to relevant training, thereby boosting their competitiveness and
facilitating further development of the local learning ecosystem.
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The findings of the research show that the role of the ESF is more than marginal. The
impact of the implemented ESF schemes regarding training behaviour and/or encouraging
co-operative networks is not apparent. The marginal role of public authorities’ support
(and the ESF as a primary public financial tool) in the local ecosystem was among the most
striking result of the survey. The results of all parts of the research suggest that the way in
which government support for training is functioning could be improved in order to better
facilitate SMEs’ learning and promote better co-operation in the sub-region.
The following primary recommendations are suggested:
●
There is a need for a more active approach to be taken by business environment
institutions operating in the sub-region. Such institutions should perform an intermediary
role between public authorities, which implement regional and national programmes, and
SMEs.
●
The way in which publicly administered support for training is functioning could be
improved, namely: diagnosis of skills needs should be treated as the most important
area under all co-funded projects; the ESF should facilitate access to training for
enterprises that are willing to invest in their human resources and should make it
possible to deliver the training “just on time”; and information on ESF measures
implemented in the region should be made more business (SME)-friendly.
●
More pro-active policy in the area of SME training is needed. The policy should be better
linked with the economic development and innovation strategy of the voivodship and
sensitive to specific sectors’ needs. Prioritisation and concentration on particular
sectors, specific economic problems or themes should be considered.
●
There is a need to better co-ordinate the national and regional public interventions in the
area of human resources development (HRD) and SME development, taking into account
the local perspective. The existing support system is confusing and not conducive for
producing the required outcomes. Local business support organisations tend to operate
within the silos of various fragmented sector-based policies and institutional
requirements and as such, are not able to properly respond to the needs of local
enterprises.
●
Enterprises in sub-regions should be encouraged to assess and communicate their
training needs. This would require forming and facilitating the development of
appropriate working groups and the fora for co-operation. As the results of the regional
workshop in Dabrowa Górnicza show, open discussion may help to articulate the skills
needs, help develop local training strategies, and facilitate co-operation. Taking into
account the results of the research (for example, poor co-operation levels, lack of social
skills, etc.), in the case of the Zaglebie sub-region, projects promoting networking and
platforms for co-operation should be encouraged.
Reference
Kubisz, M. (2011), “Leveraging Training: Skills Development in SMEs an analysis of the Zaglebie subregion, Poland”, LEED Working Paper Series 2010/2, OECD Publishing, Paris, http://dx.doi.org/10.1787/
20794797.
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Skills Development and Training in SMEs
© OECD 2013
PART II
Chapter 10
Training in SMEs
in the industrial zone of OSTIM,
Ankara, Turkey
by
Sirin Elci
This chapter begins with an explanation of the set up and purpose of organised
industrial zones in Turkey, and details the background of the Middle East Industry
and Trade Centre (OSTIM) industrial zone and the functioning of its associated
consultancy and training company of ODEM. Training and development of skills
within the zone are then investigated, and an overall lack of focus on training and
low recognition of the benefits accruing from improving employees’ skills are
discussed. Interactions between companies are also minimal, making it difficult to
assess the levels of knowledge intensive service activities (KISA), although details
of the positive results obtained by some small and medium sized enterprises (SMEs)
are outlined. Implications for policy development are then detailed, focusing on two
key areas: investing in training and skills development in SMEs; and improving the
skill ecosystem.
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Background to the Turkish case study
Established in 1967 in Ankara, Turkey, the Middle East Industry and Trade Centre
(OSTIM) were granted the status of organised industrial zone by the Ministry of Industry and
Trade in 1997. An organised industrial zone (OIZ) is an area with a necessary infrastructure
dedicated to the manufacturing industry. These zones aim to ensure that industrial activities
are carried out in appropriate places, enabling the manufacturing sector to locate and
develop according to a pre-defined plan, while preventing environmental problems.
The zones are governed under Law Number 4 562 of 12 April 2000, and the Ministry of
Industry and Trade undertake the regulatory oversight. The managing companies of the
zones are in charge of the provision of the following services: permanent and secure supply
of electricity, water and gas; construction and maintenance of roads; security; access to
Internet and web-hosting; fire brigade, fire training, first aid and fully equipped ambulance
services; establishment of environmental administration, follow up to environmental
permissions, waste management, etc.; provision of information on permission for
construction and development, maps and controls, permissions, licenses for new buildings,
expansions, renovations; sale of food for employees, catering and conference rooms.
As of 2010, there are 120 OIZs in Turkey hosting 37 000 firms, which employ
820 000 people. OSTIM is one of the leading zones in the country. It is located over
500 hectares and hosts around 5 000 companies (mainly manufacturing SMEs), which
generate approximately 50 000 jobs. The main sectors in the region are machine
construction, metal processing, machine and machine parts, plastics and rubber, electric
and electronics, medical equipment, automotive and defence. Twenty per cent of firms in
OSTIM are exporters and a majority of them are suppliers to the big manufacturers in Turkey.
The management company of OSTIM is very active in terms of providing a broad range
of services and facilities to the firms operating in the zone: it operates a number of
subsidiaries, from an employment office, to a trade fair organisation firm, and from an
energy company to a television and radio station.
One of the key subsidiaries of the industrial zone OSTIM in the area of training and
skills development is its consultancy and training company called ODEM. ODEM
conducts training and needs assessments, matches SMEs with consultants in its
database, organises low cost training courses, and assists with technology transfer and
networking. One of the strengths of ODEM is that its experts carry out continuous
company level assessments and monitoring in order to keep up-to-date with the
changing needs of individual SMEs and provide them with the required training and
consultancies. It also acts as an intermediary between SMEs and those providing
training, and 15 public support areas for training and consultancy. Another activity of
ODEM is to train and educate human resources staff to be employed by local SMEs as
intermediate workers through the employment office of OSTIM.
In addition to ODEM, OSTIM hosts a number of training and education facilities: an
apprenticeship school, a vocational training centre, vocational high schools of two regional
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universities (Fatih and Hacettepe), a technical and industrial education school, and a
vocational training and technology centre.
KOSGEB has a local branch (the so-called KOSGEB Ankara OSTIM Service Centre)
located in the zone to provide SMEs with necessary supports for growth and
competitiveness. Other important infrastructures in the industrial zone of OSTIM include
an extension of the techno-park of the Middle East Technical University (METU), hosting
60 research and development intensive companies and a joint research centre established
with the same university.
Training results for SMEs
The survey findings indicated that the majority of SMEs do not attach importance to
training and skills development (only 28% of SMEs declared that they received vocational
education and training (VET) and 25% stated that they participated in KISA over the last
12 months). Regarding the main fields of training, companies primarily focus on
organisational health and safety, and job-specific technical training, while green skills
receive the least attention from SMEs.
The majority of firms neither have a department nor a staff member responsible for
human resources. It also found that training (both VET and KISA) opportunities are not
equally distributed among staff at firms. They are mainly offered to high/medium-skilled
employees rather than low-skilled staff. Another finding is that the majority of SMEs
cannot provide an assessment on the outcomes of training (both VET and KISA) for
business, local area and industry sectors, which, in turn, may have a negative effect on the
level of interest in training activities.
While SMEs state that the costs involved in training as well as the lack of public
finance are the main reasons for not carrying out training, a relatively large number of lowcost VET and KISA providers and public finance providers are accessible and active in the
zone (perhaps more than any other organised industrial zone in Turkey).
The correlation analysis confirmed the benefit of investments in training and skills
development on innovation activities of SMEs: the existence of a formal training plan and
training budget positively affects the innovation activities of SMEs. Investment in green
skills development (particularly through KISA) has a positive impact on green innovations.
Furthermore, KISA regarding entrepreneurship positively affect management innovations
and operational innovations (which are not observed in the case of VET).
Since the clusters in the industrial zone of OSTIM are still in the embryonic stage of
development, positive outcomes and the impacts of clusters on company behaviour,
including those on training and skills development, are not yet observed. For example, a
relatively large number of SMEs state that they do not need to develop social skills of their
employees. In general, the results of cluster level analysis revealed that clusters in OSTIM
show varying levels of innovation performance, and training and skills development
investments. Similar to all other SMEs that responded to the questionnaire, cluster firms
also attach greater importance to organisational health and safety, and job-specific
technical training than any other training topics.
The in-depth interviews showed that SMEs, in general, attach importance to technical
training, and for this purpose they usually consider masters degree programmes for highskilled workers and free-of-charge training organised by local and regional non-profit
organisations for low-tech staff. SMEs consider government research and development
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support programmes as the key sources of KISA that help them develop their staff, giving
them the skills and competencies required for product development and production
improvements. The interviews also highlighted low levels of collaboration and interaction
between organisations in the industrial zone of OSTIM.
The training and skill ecosystem workshop verified the results of the field research
and provided explanations for the key findings: for example, the workshop participants
explained that the majority of the SMEs are family-owned enterprises which, in general,
are not institutionalised.
It depends on the vision and/or willingness of the owner of the company to invest in
training. Most of the time, SME owners think that an investment in training equals a waste
of money, but at the same time, never consider the cost of continuing to employ staff
without proper training/skills. There is the fear that trained personnel will leave the
company when their skills levels increase after training. The workshop revealed the need
for collaboration and communication between the public organisations and nongovernment organisations (NGOs) responsible for training/skills development in SMEs, as
well as the need for enhancing the governance system at local, regional and national level
in order to eliminate overlaps and fill the gaps in the system.
The importance of informal (KISA) training
The skills development of staff as they learn through interaction and experiencing was
difficult to ascertain. For the local area, since the level of interaction between companies is
not at a desired level, it is not possible to judge the impact of KISA on the region, according
to the interviewees.
For example, a solar energy company thinks that the high level of interaction they
have with their customers abroad has helped them to develop better skills and capabilities
in production and product development. The product and production quality has also
improved.
The research and development projects they implement through government finance
helped enhance project management and product development skills. All of these
interactions and learning by doing has helped the staff to develop valuable skills. Their
self-confidence and motivation has also increased. With improved skills and broader
vision, the company has become aware of its capabilities.
As a result, they increased research and development activities, with local input in the
research and development process, leading to a positive impact on the value chain. The
material/process quality of local companies that supply input to the products developed by
the firm increased, which led to an increase in sales and profitability of suppliers.
According to another firm, a medical company, KISA helps them to continuously
develop their skills and knowledge. Employees become better motivated and their work
quality increases. The management of the firm regularly assesses the knowledge of staff by
testing to see if they implement what they have learned. The interviewees think that
companies with improved skills and knowledge are good for the image of the local area.
However, they do not know if there are any positive impacts on the skill ecosystem in the
industrial zone OSTIM.
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Implications for policy development
In light of the research results, the following recommendations are suggested under
two main categories:
1. Investing in training and skills development in SMEs
●
Raise awareness among SMEs of the need for training and skills development through
various means, for example, by giving the right messages on wrong perceptions, such as
the idea that training has little impact on job mobility, despite employer fears about
trained staff being poached by rivals and so “losing their investment”, and realising it is
much more expensive not to train the people.
●
Identify and disseminate success stories of SMEs from different sectors who
continuously invest in training and skills development.
●
Particularly target cultural change among SME owners/managers.
●
Design and implement policy measures to stimulate training and skills development for
low-skilled workers.
●
Specific to micro-enterprises’ needs for training and skills development; to encourage
institutionalisation of SMEs.
●
Provide on-the-job coaching/mentoring to micro and small enterprises; to stimulate
development of green skills, and innovation, entrepreneurship and social skills in SMEs.
●
Encourage inter-company collaboration, and collaboration between SMEs and other
actors in the system for training and skills development (also through effective cluster
development programmes).
●
Pay attention to developing a balanced policy mix of training and skills development. For
this purpose, focus on segmentation of target groups to successfully address their needs
in the area.
2. Improving the skill ecosystem:
●
Improve governance by assigning an oversight body for SME training and skill
development, which carefully orchestrates co-operation among major players at
national/regional/sector levels – KOSGEB can play this role effectively.
●
Develop a balanced, effective and complementary set of training and skill development
programmes by evaluating existing measures (in terms of their complementarities,
effectiveness, efficiency, impact, relevance, coherence and sustainability), and by
eliminating overlaps and multiplicities.
●
Make sure that the main stakeholders in the system communicate and interact regularly
and effectively (through meetings/workshops, etc.). Regional level co-ordination can be
achieved by the regional development agencies.
●
Develop and implement tools to monitor and measure the impact of training and skills
development at different levels.
●
Modernise VET education and develop mechanisms to ensure that vocational schools
and universities collaborate with SMEs to keep their curricula relevant and current to the
changing needs of companies.
●
Conduct a skills gap analysis to identify critical workforce skills, analyse shortfalls, and
develop strategies resolving these shortfalls.
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●
Provide regular training to the staff of the organisations providing SME services,
including the public bodies implementing SME support programmes.
●
Develop an accreditation system for the organisations providing training to SMEs. Also
help them to continuously upgrade their services and improve their skills and
capabilities through training-the-trainers schemes.
Reference
Elci, S. (2011), “Leveraging Training: Skills Development in SMEs: an analysis of OSTIM Organised
Industrial Zone, Turkey”, LEED Working Paper Series 2010/2, OECD Publishing, Paris, http://dx.doi.org/
10.1787/20794797.
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Skills Development and Training in SMEs
© OECD 2013
PART II
Chapter 11
Training in SMEs in the Montréal
and Winnipeg urban regions,
Canada
by
Paul Belanger and Sylvie-Ann Hart
This chapter looks at a study carried out among 80 small and medium sized
enterprises (SMEs) in two Canadian cities, Montréal and Winnipeg, based on a
survey and case studies, which show the importance of innovation among Canadian
SMEs. These innovations in turn create new demands for skill development, both
through formal training and in informal activities. The outcomes of the study show
two significant trends. First, an uneven development of learning activities among
SMEs is related not only to the size of firms, but also to their orientation towards
innovation and shared productivity measures. Second, because they do not have
enough internal resources and flexibility to drive productivity growth through
learning and training by themselves, SMEs need some form of group based
mechanisms to solve this structural problem. However, it is noted that participation
of unskilled employees in both formal and informal learning remains an important
challenge for the great majority of SMEs.
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Background to the Canadian case study
Over the past two decades, in Canada, as in other advanced industrial countries, the
economic structure has undergone significant transformation. Under the expanding level
of economic globalisation, we have seen a huge shift in location of manufacturing
activities. As a result, over the last three or four decades, the shares of manufacturing in
the gross domestic product (GDP) and in employment have seen a significant decline.
It has therefore become important to document how the manufacturing and other
sectors, and in particular SMEs, are responding to these shocks. For these economic
players, increased productivity, especially from an international perspective, represents an
important economic challenge. The issue is to document how Canadian enterprises,
especially SMEs, respond to the rising demand for intensive skill development activities at
the workplace; a demand driven by innovation necessities both in techniques and in mode
of production of goods and services. International data tend to show that overall “training
intensity” within industries in Canada are at levels below those observed in many other
advanced industrial countries.
Small and medium sized enterprises (SMEs) play an important role in the Canadian
economy. In employment terms, they account for 64% of all private sector employment and
between 82% and 90% of total employment in health, construction, forestry, tourism and
hospitality sectors. Although resilient in the face of economic adversity, the high
proportion of SMEs raises some challenges for maintaining a productive and competitive
workforce, since smaller firms tend to have fewer resources available for training and skills
development, either formal or informal.
Against this background, Canadian studies have been carried out in two regions – the
metropolitan Montreal area in Québec, and the Winnipeg urban area in Manitoba – thus
providing comparable empirical field studies within two environments offering training
and learning opportunities for SMEs. In order to observe how SMEs deal with the demand
for workplace skills development for their personnel in these two contexts, a survey was
carried out among 80 SMEs in each region and a series of case studies were conducted on
local group based mechanisms created to support SMEs (Consortia in Winnipeg, and
Mutuelles in Montreal). At the end of the process, two regional workshops were held in
order to discuss the data and highlight the main challenges with which the SMEs are
confronted.
Training results for SMEs
There are numerous factors that affect training and skills development at the
workplace. Undoubtedly, the most universal of these is size, even though attempts are still
being made to elucidate the modus operandi of its effect. The activity sector also exerts a
certain level of influence. In order to monitor these factors, we have established a stratified
sample based on size and the activity sector.
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The SMEs were asked to specify those areas in which they had offered or supported
training within the 12 months prior to the study. The most frequently mentioned areas were:
●
Occupational health and safety.
●
Employment-related vocational or technical training.
●
Accounting and finance.
●
Information technology.
●
Human resources management.
This diversity of training areas provides an indicator of the variety and intensity of
training offered. Further diversity was also evident across the regions, with Winnipeg firms
offering or supporting more training activities than the Montréal firms. The variable of
company size, however, remained consistent, with the larger SMEs (50+ employees) in both
regions providing or supporting more training than the smaller SMEs.
The firms were asked to indicate the percentage of employees considered “highly and
moderately qualified” or “poorly qualified” who had participated in training activities in
the 12 months prior to the study. The results showed that the “highly and moderately
qualified” employees were at a clear advantage, when compared with the less-qualified
employees.
The chief finding of this study is most certainly the importance of innovation among
Canadian SMEs. A majority of SMEs reported changes in the last 12 months relating either
to new or renewed products or services, methods of production, technologies or
equipment, or management approaches. These changes create a subsequent demand for
skill development via both formal training and informal activities.
In two SMEs out of five, in both regions, participation in systematic training has now
become a regular activity, and this trend is even stronger among those that have
introduced significant changes. We also observe an even larger proportion of firms
involved in knowledge intensive service activities (KISA). These informal change-driven
learning opportunities are the result of production of new goods or services, introduction
of new technologies or equipment, or improvement of work processes and procedures.
Additionally, as is the case for structured training, the study showed that both highly and
moderately qualified employees tend to be at a clear advantage when compared with lessqualified employees. Thus, participation of unskilled employees in both formal and
informal learning remains an important challenge for the great majority of SMEs.
In the Montreal region, learning and training activities in SMEs tend to be less
numerous and intensive than in the Winnipeg region. However, due to the requirements
stipulated by the Quebec Skills Development Act, such activities in this province tend to be
more institutionalised and thus more visible within the organisation, its budget and its
decision-making structure. This is probably a result of the Quebec Skills Development Act,
a legislation that requires companies to invest the equivalent of 1% of their payroll in
training. Since firms have to monitor their learning activities more closely, this would tend
to give such activities more visibility and accountability.
This study illuminates three important features regarding skills development in SMEs.
Firstly, the uneven development of learning and innovation activities is related not only to
the size of the firms, but also to their orientation towards innovation changes and shared
productivity measures. Secondly, SMEs, because they do not have the internal resources
and flexibility to drive productivity growth through learning and training, need some form
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of group based mechanism to solve this structural problem. Finally, the study illustrates
the importance, for efficient and relevant skills development, of contextualised local
approaches proceeding through the proper evaluation of local needs and contexts, in line
with firms’ prospective action plans.
The importance of informal (KISA) training
The most common KISA undertaken by firms were business development activities
(brainstorming on the production of new goods or services, opening of new markets, etc.);
activities relating to the introduction of new technologies or equipment; and activities for
the ongoing improvement of work processes and procedures, etc. Other activities
frequently mentioned included production, sales, engineering and technical services;
management of the business, health and safety, accounting and finances, etc.
Tracking KISA provided an indicator of the variety and intensity of change-related
learning or inter-learning activities. The survey shows that firms in the Winnipeg region
used KISA for skills development of their staff more than Montréal firms. This shows that
KISA skills development does not need to be linked with large urban regions for success.
KISA skills development is also important among smaller firms, a development that may
reflect their parallel greater levels of innovation and exportation of their production.
The survey results showed that, as was the case for formal training activities, KISA
skills development was concentrated on the higher skilled employees within the firm, with
“highly and moderately qualified” employees tending to be at a clear advantage when
compared with the less-qualified employees. This gap, however, is less prominent in
smaller firms where the gap is less pronounced, and less-qualified employees have a
greater level of access to KISA than to structured training.
Presence of regional learning and training ecosystem
A second contextual issue for the development of KISA is the uneven awareness and
active recognition by local actors of their regional learning and training ecosystem in order
to find training and learning resources that meet their firm’s skill development needs.
Montréal and Winnipeg are major cities offering a good concentration of players, who
can support firms in all fields, including training and skills development. It is also in these
regions that there are the most highly diversified and rich supplies of training in each
province, in both the public and private networks.
However, it is important to acknowledge the level of awareness among SMEs in these
two regions regarding these external resources, and the support they provide in order to
meet the internal demand for learning. Firms were asked to indicate the players that they
deal with in the areas of training and skills development for their employees. The results
for the two regions are very similar, with half of the SMEs having links with three and more
external actors in the field.
Implications for policy development
The first policy issue for increasing skills development in SMEs is to look at the
internal requirements of the firms to help them maintain their position in the market. This
inter-provincial study of skill development in Canadian SMEs, conducted in Montreal and
Winnipeg, unearthed new information regarding the general situation of these enterprises,
which increasingly require change and innovation in order to increase their productivity,
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and therefore to reposition themselves towards new competitors. In both regions, seven
SMEs out of ten undertook at least one change within the previous year; according to
OECD’s indicators, four out of ten could be considered highly innovative firms. However,
without external support and mechanisms for sharing expertise, small businesses (1 to
49 employees) in particular will have serious difficulties meeting such challenges.
The recommendation here is to develop alternative ways of skills development by fostering
public-private partnerships to design and support knowledge sharing mechanisms where small and
medium enterprises can discuss their innovations and the way they approach challenges and
operations for their products and services. Knowledge sharing is an interactive activity, which
itself constitutes an alternative and novel way to increase the capability of the firm, as well
as providing problem-solving and other related skills to employees involved in these
activities.
Second, involvement of employees in the training process (from assessment of needs to
communication and implementation of activities, followed by their evaluation),
accompanied by relevant skills development via informal activities, has been observed as
being an efficient implementation mode for innovations, enabling businesses to meet their
productivity requirements. This study found that participation in formal training, as well
as in KISA, is surprisingly high in such contexts. Similarly, case studies demonstrated a
high degree of interest from SMEs towards participation in co-operative groups that can
help them successfully implement and expand their innovations.
Third, enterprises should invest in employees at all levels in order to meet organisational
challenges. In the context of introducing new techniques and modes of production
throughout the organisation, the prevalent trend is to limit training activities to upper
layers of qualified staff, even though innovation challenges result in much wider training
needs. Less qualified employees, compared to highly qualified employees, need greater
opportunities to acquire required skills and thus fulfil their role in these ongoing changes.
Fourth, group based mechanisms should be encouraged for training and skills development
in SMEs, to ensure a continuing skills development process within organisations. Due to
their size, SMEs do not have the requisite internal resources to undertake skills
development alone. The study shows that small businesses behave differently than
medium or large firms in terms of training and skills development. Not surprisingly (since
the existing literature shows that there is a link between the size of businesses and their
training provisions), human resources management indicators clearly distinguish
medium-sized businesses (ME) from smaller ones (SE) in both regions. Even though SMEs
are surrounded by a training ecosystem that is filled with available resources, particularly
in the case of SEs, they need external support to assess their own local needs, to tap these
regional resources, and to integrate the training initiatives within their internal context
and requirements. The seminars organised in both regions confirmed that there is a
structural need for long-term support to smaller businesses, such as training brokers,
evaluation of needs, inter-learning innovation driven opportunities and exchanges
between businesses. Case studies show that more concretely, two initiatives can serve as
models in fulfilling these needs: Mutuelles de formation in Quebec and Consortia in
Manitoba.
Fifth, encourage innovation and exporting activities as a strategy for skills development.
Analysis of the impact of levy legislation shows how, in the Montreal urban region, learning
and training activities in SMEs tend to be less intensive than in the Winnipeg urban region.
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The question raised is whether or not this could be related to the different policies
involved. The Province of Quebec’s Skills Development Act requires all companies having a
payroll over a certain level to invest the equivalent of 1% of their payroll on training, while,
in Manitoba, the priority is focused instead on innovative and exporting SMEs. Firms in
Quebec tend to monitor their learning activities more closely, and hence become more
accountable, but training activities in Manitoba’s SMEs remain more numerous. An
interesting discovery coming out of this study, and one which highlights the need for
public support in this area, is the observation of a significant link between the
implementation of innovations, and businesses exporting products outside Canada.
Private investment in skills development seems to be triggered by innovation and
exporting activities being part of firms’ business strategies.
Sixth, skill development activities need to be grounded in prior local needs assessments. The
survey, the case studies and the workshops pinpoint that too often, general support is
limited to direct training activities, making it difficult to ground such activities in the local
context and thus ensure better return on investment. There is a growing consensus around
the operating principle that, in order to generate the expected outcomes, investments in
skills development and training activities must proceed through a proper evaluation of
needs and of local contexts. Investments in training are “worth it” if, and only if, an
evaluation of the needs is carried out beforehand – through shared, collaborative processes
leading to actions. In this way, training can be planned more consistently, in line with
businesses’ strategies at a more general level.
Finally, governments should facilitate SMEs’ awareness of available training support. SMEs
are not always aware of the range of training programmes and initiatives that are available
to them. Facilitating ways for SMEs to access the information they need for workforce
development can foster their participation in existing initiatives.
Models for co-operative skills development
The study highlights the need for SMEs to join group-based mechanisms (GBMs) for
training and skills development, even though they may already have a resource-rich
training environment. Seminars conducted in the two regions confirmed this structural
need, while the case studies carried out in the two regions revealed two types of concrete
GBM models – the Mutuelles de formation in Quebec and the Consortia in Manitoba.
In Montréal, FormaPlus is a voluntary regional grouping of SMEs that share
management and skill development services. A board made up of members’
representatives governs the group. This Mutuelle de formation offers its members (more
than 100) many customised activities to support their business strategy: needs assessment
regarding skill development; brokerage services to select the most appropriate resources
within the regional ecosystem; training follow-up; evaluation and optimisation of
interventions; plus specific training sessions required by its membership on problemsolving, conflict management, accountancy issues, and time-management.
FormaPlus supports its members by offering services that they cannot afford on their
own, including expertise and knowledge transfer required to cope with technological
development and transformation of economic context, advice for recruitment of
personnel, supporting a culture of continuing professional development, contact and
networking in the regional training ecosystem.
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In addition, member firms are organised in sub-groups of 25-30 firms, so that a
professional of FormaPlus, attached to a group, could provide each company with the
ongoing consultant service of a familiar expert adviser in management and development
of competencies. To become a member, a firm has to pay a membership fee equivalent to
0.1% of its payroll. This gives each firm a minimum number of hours of free services.
In Winnipeg, the Canadian Manufacturers and Exporters Association of Manitoba has
developed and hosts a related programme called Consortia. Aimed at companies
committed to improvement and willing to share successes as well as challenges, Consortia
are formal groups of ten to twelve companies (mainly SMEs) with the goal of achieving step
changes in business performance. These groups of enterprises, which are not in
competition, are created around a theme of common concern (i.e. lean production,
sustainable development or operational excellence); they come together every month in
rotation at each member’s site. The purpose of these meetings is to collectively observe the
situation of each company, discuss the problems encountered by those firms and indicate
potential improvement.
A non-formal environment facilitating sharing and “stealing” of innovative practices
facilitates this KISA oriented inter-learning process. Each Consortium is supported by the
organisation CME Manitoba, and besides forming these small groups of non-competing
firms, CME provides them with a facilitator, to ensure continuity and reporting, while
helping find resources to meet specific short term needs. CME Manitoba also organises
leadership training and other advanced courses. To train mentors on the Lean approach, it
offers Kaisen training courses of nine days duration, distributed over a three week period.
CME also facilitates cross-consortia exchanges by networking consortia around a common
theme and offering joint activities.
These two models of co-operative knowledge building are a major area of policy
intervention in local skills development in the two case study regions. Both the Mutuelles
de Formation and the Consortia, are sustained and financed not only by the participating
enterprises but also by public funds. These public funds aim to support innovation and
improve productivity, a requirement that, in the present economic context, is cutting
across all Canadian enterprises, large or small.
These group-based mechanisms are becoming essential as participatory HR support
services, providing SMEs with opportunities and resources similar to the ones available in
larger firms. Moreover, they put SMEs in interactive communication exchanges in order to
share expertise and benefit from their respective experience both in innovation and
learning strategies. The participating SMEs then become active actors in their respective
ecosystem.
Reference
Belanger, P. and S. Hart (2012), “Leveraging Training: Skills Development in SMEs: An analysis of two
Canadian urban regions: Montreal and Winnipeg”, LEED Working Paper Series, OECD Publishing,
Paris, http://dx.doi.org/10.1787/20794797.
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Skills Development and Training in SMEs
© OECD 2013
ANNEX A
Contributors’ biographies
Professor Paul Belanger, University Québec à Montréal
Professor at UQAM University in Montréal, Paul Bélanger is Director of the
Interdisciplinary Research Centre on Lifelong Learning (CIRDEP) and, since 2009, Director of
the Observatory on Skill and Work, related to vocational adult learning policies. He was the
Director of the UNESCO Institute for Lifelong Learning in Hamburg (1989-2000). His
contributions include: Shifting Patterns in Adult Education Participation (Pergamon, 1997);
Transitions toward LLL: social indicators (Tokyo, 1998); Unlocking Peoples’ Creative Forces,
A Transnational Analysis of Adult Learning Policies (UNESCO, 2000); Learning Cities, Concept and
Issues in Duke, (ed.) Making Knowledge Work, NIACE; Portrait of Work-related Learning in Quebec,
Ottawa 2008: CCL/WLKC; Bélanger, P. et al. (2010) La formation de base dans les PME: CIRDEPUQAM; (2010), Theories of Adult Learning and Education (Opladen, Germany: B. Budrich
Publishers).
Professor Paul Dalziel, Lincoln University
Professor Paul Dalziel is Professor of Economics and Director of the Regional
Development research programme at the AERU Research Centre, Lincoln University, New
Zealand. Professor Dalziel’s research focuses on New Zealand economic and social policy.
He is currently the President of the Australia and New Zealand Regional Science
Association International (ANZRSAI).
Dr Ans De Vos, Vlerick Business School
Dr Ans De Vos is currently Associate Professor at the Competence Centre People and
Organisation of Vlerick Business School. Her research interests include psychological
contracts, career management, career development and competency management. Dr De
Vos is co-promoter of the Steunpunt Werk en Sociale Economie, a policy research centre on
work and social economy funded by the Flemish government (Department of Work and
Social Economy) and the European Social Fund (ESF), where she is responsible for the
research on competency development.
Ms Sirin Elci, Technopolis Group Turkey
Sirin Elci is the founder and Director of Technopolis Group Turkey. She has a
professional experience of 20 years, around 16 in Science and Technology and innovation
policies, enterprise, entrepreneurship, and innovation development actions. She is also
teaching Innovation Policy to the MS and PhD students at the S and T Policy Studies
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ANNEX A
Programme of the Middle East Technical University in Ankara. During her career, she has
provided advice and support to many international organisations (EC, World Bank, OECD,
UNESCO, UNDP, etc.), and a variety of government departments, regional authorities and
organisations in Turkey and abroad. She also participates in a number of international and
national associations and networks on entrepreneurship and innovation, provides
mentoring to youngsters and entrepreneurs all over the world, and sits on the board of
several SMEs and NGOs.
Professor Anne Green, Warwick University
Anne Green is a Professorial Fellow at the Institute for Employment Research at the
University of Warwick, the United Kingdom. Her research interests span local and regional
labour markets; spatial aspects of economic, social and demographic change; trends in
employment and unemployment; policies to address worklessness; demand for and
supply of skills; labour market information and other local indicators; migration and
commuting; urban, rural and regional development; and evaluation studies – including
welfare-to-work and area regeneration initiatives. She currently leads the national
evaluation of the City Strategy initiative in the United Kingdom and is undertaking
research projects on labour market trends and policies.
Ms Sylvie Ann Hart
Sociologist, Sylvie Ann Hart, underwent her doctoral studies at l’Institut d’Études
Politiques de Paris. Since 1988, she has been involved in applied research on skill
development and labour market policies within different professional and industrial
networks in Québec, Canada. In 2009, she became Senior Researcher at the Observatoire
compétences-emplois at UQAM, Montréal and Co-ordinator of the centre. Her scientific
contributions include: L’évolution du PAMT et ses impacts sur les employés et les entreprises,
Montréal : CSMOIPFMAC (2010); (with Boulet, B. and Legault, I.) Guide d’apprentissage pour
obtenir la certification en martelage, Québec : Gouvernement du Québec (2010); Enquête 2006 sur les
effectifs et les salaires dans l’industrie de la tôlerie de précision, Montréal : CSMOFMI, (2008); (with
Gamache, M. and Lejeune, M.) Les entreprises manufacturières et l’environnement de formation,
Montréal : INRS-Urbanisation Culture et Société (2005); (with Lesemann, F. and Lejeune, M.)
Inventaire international et documentation des dispositifs nationaux de qualification professionnelle
dans sept pays, Montréal : INRS-Urbanisation Culture et Société (2005); Les entreprises et la maind’œuvre dans les industries de la fabrication métallique et électrique d’usage industriel : une étude
qualitative, Montréal : CSMOFMI (2000).
Mr Michael Kubisz
Michael Kubisz is a Polish expert on employment policies, human resources
development and regional policy. Michael Kubisz is a graduate of Warsaw University and
the University of Cambridge (United Kingdom). In the years 1998-2006 as a Director in the
Ministry of Labour and Social Policy, and the Polish Agency for Enterprise Development, he
was involved in the preparation and implementation of national programmes for human
capital development, financed by the pre-accession funds and European Social Fund (ESF).
He was also responsible for developing and launching ESF activities in the field of
enterprise human resources development in Poland in 2004. In 2006, he participated in the
development of the Human Capital Operational Programme for 2007-13. He currently
works as an evaluator of programmes and projects in Poland and in south-eastern Europe.
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ANNEX A
Dr Cristina Martinez-Fernandez
Dr Cristina Martinez-Fernandez is a Senior Policy Analyst on Employment and Skills,
Green Growth and Southeast Asia at the Organisation for Economic Co-operation and
Development (OECD), Local Economic and Employment Development (LEED) programme.
She works on issues related to the challenges of skills and training systems for SMEs,
entrepreneurial and innovation activities; industrial policy, climate change and the
transformation of labour markets into the low-carbon economy; the challenges of
demographic change and an ageing society for skills and employment development.
Cristina also manages the OECD/LEED Initiative on Employment and Skills Strategies in
Southeast Asia (ESSSA). Before joining the OECD she was an A/Professor at the Urban
Research Centre, University of Western Sydney in Australia where she led the Urban and
Regional Dynamics programme which analyses industry change, urban performance and
socio-economic development within the frameworks of innovation, globalisation and the
knowledge economy.
Dr Laura E. Martinez-Solano, Warwick University
Laura is an RCUK senior research fellow at the WMG, University of Warwick. She is
interested in analysing innovation and product/service development processes. As part of
PARD, Laura developed a framework to work with and supported companies to effectively
manage their innovation processes. The companies reported a value-add of around £7 m
from this project. Before this, she participated as an Irish research team leader in a 3-year
OECD project on Knowledge Intensive Service Activities in Innovation (Software, ICT,
Tourism and HC). Outcomes from this study have provided material for several
publications. Her PhD focused on technology transfer through FDI. In addition, she was an
Economic Advisor at the National Assembly for Wales. She was also a research assistant at
the Engineering Research Institute (II-UNAM) (1991-95), using 3-D simulation programmes
in thermodynamics for Petroleum and Electricity firms.
Dr Samantha Sharpe, Centre for Business Research, University of Cambridge
Dr Samantha Sharpe is a research associate at the Centre for Business Research, Judge
Business School at Cambridge University, the United Kingdom. Samantha has held
academic posts, most recently the NESTA (National Endowment for Science Technology
and the Arts) Innovation and Policy Research Fellow at Cambridge University, senior policy
positions in economic development and environmental management in government and
worked as a contracted expert for the OECD. Samantha’s research focuses on territorial
industrial development and the spatial analysis of innovative activities, particularly
understanding how the qualities of “place” interact with economic activity in an urban
environment. Outcomes of this research are policy and industry advice around the support
of innovative activity in places, the incubation of new technology, and the role public policy
can play in generation and re-generation of sustainable economic activity.
Dr Tamara Weyman
Dr Tamara Weyman works as a contracted expert for the OECD, working on various
projects involving employment and skills, SMEs development, Southeast Asia, territorial
development policy, and demographic change and sustainability. Tamara worked as a
Research Associate at the Urban Research Centre, University of Western Sydney (UWS) and
completed her PhD on spatial information sharing for better regional decision making in
SKILLS DEVELOPMENT AND TRAINING IN SMES © OECD 2013
157
ANNEX A
2007at UWS. Since 2009, Tamara has been involved in the COST Action TU 0803 “Cities
Regrowing Smaller”.
Ms Ine Willemse, Vlerick Business School
Ine Willemse is currently Research Associate at the Competence Centre People and
Organisation of Vlerick Business School. Her research interests include career
management and competency development. She is currently a researcher for a study on
competency development within organisations, a project that is part of the Steunpunt Werk
en Sociale Economie.
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SKILLS DEVELOPMENT AND TRAINING IN SMES © OECD 2013
ANNEX B
ANNEX B
Survey participant characteristics
Table B.1. Survey populations and sources
Country
Survey response
Belgium
188
University Business School Database and Social Partner Database.
New Zealand
74
Populations sourced from databases of the Canterbury Employers Chamber of Commerce,
the Ashburton Business Association, Enterprise Ashburton, the South Canterbury Chamber
of Commerce, the Canterbury Development Corporation and the Apparel and Textile Industry
Training Organisation. Green questions asked only of 2nd survey population.
511
Poland used a different methodology to obtain responses from the TSME questionnaire.
A stratified sample of firms from the region was identified, which equals 0.7% of the
population. The sample was created on the basis of the National Office for Statistics data.
Representative samples of all branches, including proportional representation of micro,
small and medium firms (to reflect the actual distribution of micro, small and medium),
and representative samples of enterprises from urban and rural areas. The actual firms
(on the basis of the sample described above) were taken from the national register
of companies (with addresses and other co-ordinates). The survey was then administered
via face-to-face interviews and continued until the target sample was reached.
108
An email request was sent to the company databases of OSTIM Organised Industrial Zone
Administration and KOSGEB Service Centre in OSTIM District. Also, within the clusters,
some SMEs completed the survey via face-to-face interviews Approx. 50% of the surveys
were completed via telephone interview, with the rest completed online or face-to-face.
50
Online questionnaire. Sample drawn from SMEs in the West Midlands region who had
responded to the NESS09 survey and had indicated that they could be approached again.
Poland
Turkey
United Kingdom
Canada
149
Total
Notes about the sample
Firms sampled from the regions of Quebec and Manitoba.
1 080
Survey respondents by country
Number of respondents by country
Belgium
United Kingdom
New Zealand
188
50
74
Poland
511
Turkey
108
Canada
150
Total
SKILLS DEVELOPMENT AND TRAINING IN SMES © OECD 2013
1 081
159
ANNEX B
Survey respondents by business size
Business size
160
Large
Medium
Micro
Small
Total
Belgium
2
12
88
86
188
Canada
1
49
23
76
150
United Kingdom
1
3
22
24
50
New Zealand
2
6
37
29
74
Poland
0
80
337
94
511
Turkey
0
14
25
69
108
Total
5
159
524
349
1 081
SKILLS DEVELOPMENT AND TRAINING IN SMES © OECD 2013
ORGANISATION FOR ECONOMIC CO-OPERATION
AND DEVELOPMENT
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OECD PUBLISHING, 2, rue André-Pascal, 75775 PARIS CEDEX 16
(84 2012 03 1P) ISBN 978-92-64-17529-7 – No. 60530 2013
OECD Skills Studies
Skills Development and Training in SMEs
Overview of training and skills development in SMEs
PART I. Cross-country analysis of skills development approaches in SMEs
Chapter 1. Formal training and skills development: The state of play
Chapter 2. Skills development on the ground: Formal and alternative approaches by firms
Chapter 3. Innovators, exporters and new skills development
Chapter 4. Learning by doing – Best practices in training and skills development
Chapter 5. Skills and training ecosystems
PART II. Key highlights from case studies
Chapter 6. Training in SMEs in the Canterbury region, New Zealand
Chapter 7. Training in SMEs in the West Midlands region, United Kingdom
Chapter 8. Training in SMEs in the East Flanders region, Belgium
Chapter 9. Training in SMEs in the Zaglebie sub-region, Poland
Chapter 10. Training in SMEs in the industrial zone of Ostim, Ankara, Turkey
Chapter 11. Training in SMEs in the Montréal and Winnipeg urban regions, Canada
Consult this publication on line at http://dx.doi.org/10.1787/9789264169425-en.
This work is published on the OECD iLibrary, which gathers all OECD books, periodicals and statistical databases.
Visit www.oecd-ilibrary.org for more information.
ISBN 978-92-64-17529-7
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